Gold & Rigs & Iron Ore
Comments of particular interest are noted with ‘*’.
- There are abundant conflicting influences on supply / demand balances for most commodities, driven mostly by restrictions and issues related to the COVID-19 pandemic, which coupled with political decision making, makes forecasting with confidence very difficult. Many companies have withdrawn guidance on their forecast results.
- Fundamentals for long term expectations do not appear to have materially, changed, if normal expectations for economics prevail post-COVID.
- Coronavirus – the battle continues, with China, Australia & NZ emerging from lower infection rates and Europe and notably USA opening up at higher infection rates. Russian rates have increased markedly too.
- Gold – Retains safe-haven status through jump in ETF uptake, though with corresponding slump in Jewellery demand.
- Base metals: Watch the base metals as countries emerge from lockdowns …
- Oil markets continue to re-stabilise, as best they can, with significant storage issues. However rig numbers have been slashed, notably in USA. Saudi’s rig numbers increased yr-on-yr. (… the benefits of low cash costs). USA’s traditional ‘driving’ season may be stunted this year.
- Iron ore: Chinese and South Korean demand may be a salve for Australia’s lockdown battered economy
*Copper Mine-supply is starting to ramp back up. Headwinds and Tailwinds at the same time.
*Cobalt China Molybdenum Cu-Co product exports from DRC diverted through non-South African ports.
Nickel China port stocks of Ni ores is falling.
*Zinc & Lead Zn concentrate TC’s lower in an uncertain market. China’s Pb-acid battery Capacity util’n is lower.
Tin Global tin mine supply to contract in 2020. Difficult to forecast re-opening timings – uncertain times.
*Aluminium Tariffs have done nothing to reduce USA’s import dependency. “They never could.”
*Gold Gold price steady though retains safe-haven. Market expects equities rallies.
*Platinum & Palladium CHN (WA) & IPT (NSW) both report stunning Pt & Pd intercepts at exploration projects.
*Oil Prices rose despite ongoing increases in USA oil stocks. Expect volatile prices ahead.
Coal China’s long Labour Day holidays slow trade this week. U/G explosion at Grosvenor mine Qld.
*Iron Ore Brazil – China shipments reduced while Australia-China & South Africa-China shipments rose.
Shipping Despite a resilient iron ore market, long haul Cape-sized shipments pricing fell.
*Gold – Supply-Demand & Central Bank holdings: ETF’s up but Jewellery down.
*Port Hedland – Iron Ore shipments: Shipments fared well thus far thanks to China & Sth.Korea.
*Baker Hughes – World & North American Rig Counts: massive cuts in USA oil rig counts.
Japan – Industrial Production: continued negative growth over all.