China Bans

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

The world’s equity and commodity markets appear to be widely comfortable with the USA election outcome of a President-elect Joe Biden:

  • Some concerns regarding the USA election outcome are:
    • Markets still contemplating a period of little change (Democrat President & Congress, but a Republican Senate), meaning no radical changes expected.
    • Transfer of power (20 Jan) still looks contentious. 
  • Covid-19 infection numbers (and deaths) continue to grow in USA, Europe, India and South America (Brazil).   Several commodity outlooks cite ‘recovery’ though there is still a likelihood that Covid-19 will dampen forecasts. 
  • Gold price outlook remains replete with potential catalysts.   Goldman Sachs bullish outlook.
  • Base metals’ prices lifted upon expectations of improving outlook via stimuli.  However it is unlikely that Covid-19 influence has finished yet.
    • Fundamentals for most base metals remain strong.  
  • Oil market prices lifted.
  • Coal markets remain uncertain regarding China’s (unofficial) restrictions on Australian exports.  
  • Industrially China (and parts of Asia) are recovering, while recovery in the rest of the world is a struggle.

SUMMARY  

Copper  Cu prices responding to strong Chinese demand and South American supply disruptions. 

Cobalt  Roskills forecasts steady demand growth for CO to 2030.    

Nickel  .Ni price up on near term supply/demand.   Mid term supply growth is expected to soften outlook.

Zinc & Lead  RVR is mining higher grade polymetallic ore.   IBG is progressing bank financing for Citronen.  

Tin  AfriTin continue to ramp up Uis Sn mine in Namibia.       

Aluminium  ABX progressing Binjour toward production of metallurgical grade bauxite in Qld.

Gold  USA election has a new President-elect (Joe Biden).  However control of covid-19 is also required. 

Platinum & Palladium  Pt demand forecast down in 2020, however growth is then expected out to 2024. 

Oil  Covid travel restrictions are impacting oil prices.  OPEC considering extending production cuts.

Coal  Very little clarity yet with regard to Chinese restrictions on imports from Australia. 

Iron Ore  Seaborne iron ore prices expected to decrease in Dec20Qtr. 

Shipping  Asian freight rates reduced last week on slowing steel activity, and seasonal weaker winter buying.

General 

USA – Electricity End Use:  Industrial usage normally falls at mkt ‘crashes’, and recovers poorly.

Baker Hughes Rig Counts:  Rig counts recovering tentatively with increases in oil price (from lows).

USA – PMI:  OMI firmed upward (in most segments) suggesting a stronger outlook.

USA Construction Spending:  Again, positive growth only for private & residential  spending.

Japan – LNG Prices:  prices recovered slightly.