World Steel – China: Industry & Energy

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

The world’s equity and commodity markets appear to collectively be taking long and deep breaths.

Concerns ahead include:

  • The USA election, for which many are now believing Biden’s lead is large enough to provide a victory”
    • The 2020 United States presidential election is scheduled for Tuesday, November 3, 2020.  It will be the 59th quadrennial presidential election.  
    • Voters will select presidential electors who in turn will vote on December 14, 2020, to either elect a new president and vice president or reelect the incumbent(s).
    • The constitution does not actually set an election date though historically that has been consistent.   It does specify that the President-elect will be inaugurated on January 20th
  • In the mean time the (“lame duck”) president remains in his post.  
    • That is of some concern to Democrats, and the markets,  if as is thought, Biden wins. 
  • Covid-19 infection numbers (and deaths) continue to grow in USA, Europe, India and South America (Brazil).  ,
    • The markets widely reacted positively to the renewed prospect of support for a USA recovery, following Trump’s switch to support a stimulus package.  
    • In reality a USA recovery  will take a while. 
  • Gold price is awaiting some clearer direction:  We believe there is some optimism for recovery stimuli being promoted, and partly a stronger USD (this week).   
    • There are no notable reductions in geopolitical risk, nor any (major) escalations, though several outbreaks of peace are being attempted: .  
    • UAE & Bahrain appear to be achieving benefits of mutual agreements.
    • Armenia and Azerbaijan have agreed to a cease fire.  
    • Yemen’s warring sides have completed a mass prisoner swap.
  • At this week’s LME Week, Copper stood out as the most attractive base metal, displacing nickel which held that position for the past two years.
    • Fundamentals for most base metals remain strong.  … with the market largely waiting for a long heralded demand pickup. 
  • Oil markets are struggling at low prices, driven by broadly lower demand. 
  • Industrially China (and parts of Asia) are recovering, while recovery in the rest of the world is a struggle.