Rigs, Port, Japan

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

Whether President Trump’s 180° reversal from his position a few days ago was an intended moved to properly posture himself and gain an edge for negotiations with Nancy Pelosi, or whether he simply changed his mind, is something only Donald Trump knows.  Earlier this week President Trump announced that he will no longer negotiate with Nancy Pelosi with regards to passing a greatly needed fiscal stimulus package for the USA.  Then just a few days later he seemed to back away from that statement as he said he was willing to negotiate on certain components of the fiscal stimulus bill. 

  • The markets widely reacted positively to the renewed prospect of support for a USA recovery.  In reality it will take a while. 
  • Gold price rebounded somewhat this week. 
    • There are no notable reductions in geopolitical risk, nor any escalations.  UAE & Bahrain appear to be achieving benefits of a local outbreak of peace.
    • The looming USA presidential elections remain an uncertain likely negative sentiment factor, until there is some certainty. 
    • Meanwhile fundamentals for several commodities are strong.

SUMMARY  

*Copper  Current global Resources for Cu, Co & Ni, appear inadequate for looming demand growth.

Cobalt  The global health crisis is slowing the development of processing plants.  

*Nickel  Vale New Caledonia to cease operations at Goro, potentially a significant reduction in Ni supply.

Zinc & Lead  Zn TCs reduced on supply disruptions.  (Pb) Chile’s environmental laws to not threaten Li supply.

Tin  (Sn) USA government to invest in mining supply of “critical” (Ni, Co, REE, Li) minerals..     

Aluminium  China’s primary & unwrought Al imports attempting to offset shortages of scrap Al.

*Gold  President Trump’s reversal on policy, to now negotiate a fiscal stimulus package. 

Platinum & Palladium  Pt demand to benefit from hydrogen powered energy.

*Oil  OPEC+ believes “the worst is over”.  Issues policing its policies.   

Coal  Coking coal market may be bottoming.  Chinese import controls, rumoured, but not declared. 

*Iron Ore  WA Govt forecasts for ore prices to really slow into FY22. 

Shipping  Capes & Supramax rates down while Panamax rates up.  

General 

*Port Hedland – Iron Ore shipments:  Still increasing, mostly to China.

*Baker Hughes – Rig Counts – World & North America:  Rig numbers appear to have bottomed.

Japan – Industrial Production:  recovery in most segments has begun from April-June lows.

*Japan – LNG prices:  Recovering from lows, with healthy outlook into December.