Coronavirus- USA / China

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:  

  • Coronavirus:
    • had a strong negative impact on China’s industry and energy output for January-February.  
    •  also influenced numerous investment decisions in various commodities.  
    • Charts of China’s infection rates show the recent decline to almost zero, while the rest of the world’s infection rates escalate strongly.
    • China’s industry is ramping back up while working through relaxation of coronavirus restrictions.  
  • Saudi Arabia has taken control of the global oil output and pricing, with implications for USA’s price sensitive shale drillers. 
  • Gold price fell amid the panic, seemingly in a flight to USD as a ‘safe-haven.  Though the sudden strength of the USD meant that price increased for in several other country currencies.  

SUMMARY   

*Copper  14% of Cu miners are operating at losses at current (unsustainable) prices. 

*Cobalt  Expect less Co in batteries, but Co demand is still forecast to end up with shortfalls.   

Nickel  Nornickel forecasts higher Ni surplus, due in part to coronavirus impacts.

*Zinc & *Lead  Lundin Mining idles its Neves Corvo expansion project.  MYL progresses with Bawdwin Pb deposit. 

*Tin  Alphamin exercised an option to defer debt payments while developing Bisie, due to coronavirus.       

Aluminium  Collapse of auto production, a core Al consumer, needs a smelter response of reduced Al output. .

*Gold  Price down in USD but up in others.  BoA analysts forecast >USD 1,600/oz avg for 2020. 

Platinum & Palladium  Nornickel revised Pt outlook for a higher surplus.  Pd to record a smaller deficit.  

*Oil  Saudi Arabia takes control and executes a market changer.  Very low cost production.   

Coal  European car manufacture closures crimp demand for USA HCC in particular.  Qld COVID-19 case.

Iron Ore  Chinese steel consumption has started to lift meaningfully post COVID-19.  

Shipping  Freight rates dropped. Demand for Capes picked up.  

General  

Port of Singapore:  Shipping traffic for Asia recorded notably positive growth.

*Coronavirus:   China vs Rest-of-World.  Country testing #s.  Aust infections by age group. 

USA – Treasury Yields:  Sharp drop.  Normal curves, with short end close to 0.0.  

USA – New Housing Starts:  Strong positive growth.  May have resumed leading IP.

USA – Industrial Production & Capacity Utilisation:  recovered to 0.0% growth.

*China – Industrial & Energy output:  Strong -ve growth for most output segments for Jan-Feb.