USA, Japan, Silver

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

  • Market activity continues to refocus from sentiment to fundamentals. 
  • Base metal markets are tightening further. (pinch points & prices.
    • Pinchpoint graphs (based on exchange stocks) continue to highlight tightness in markets for Cu & Ni in particular.
    • Reports highlight tight markets in: Cu, Co, Ni, Sn, Zn & Pb
  • Aside from China, demand is increasing (slowly) in key industrial nations (USA, Japan & Europe).   
    • Most recently Tesla is having to slow its rollout of some models (trucks) as it is short of key battery minerals (Li, CO, Ni, graphite). 
  • Covid-19 is far from peaking, as more is learned about emerging mutating strains, and is still disrupting transport and commercial businesses.

SUMMARY  

*Copper  Cu is forecast to outperform other commodities in 2021.  

*Cobalt  Outlook for cobalt production is good, particularly as Co is usually a co-product.  

*Nickel  Tesla to join Indonesia’s plans for an EV battery supply chain in-country.

*Zinc & Lead  Zn & Pb TCs down on limited concentrate supply.  

*Tin  Tin is currently subject to a ‘physical’ supply squeeze, driving prices up.    

Aluminium  Chinese plants planning holidays during CNY.

Gold  Selling pressure attributed to strong USD & increasing yields. 

Platinum & Palladium  Northam Platinum considering acquisition of the Bokoni mine (Sth Africa).

*Oil  Economic revival hopes and OPEC supply curbs are supporting oil prices. 

Coal  Coking prices remain strong.   Thermal prices softened ahead of Chinese New Year. 

Iron Ore  China plans to moderate steel output, but current momentum is strong. 

Shipping  Shipping rates declined this week, ahead of Chinese New Year.

General 

Silver:  A mis-conceived ‘squeeze’.  The Redit call was never about silver.

*USA – Purchasing Managers’ Index:  Strong outlook (new orders, production)!  Sustainable?

*USA – Construction Spending:  Positive growth, though not in Non-Residential.

*Japan – Industrial Production -segments: Recovering.  Some segments yet to record +ve growth.