Freight: China, Port Hedland, Singapore

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

  • As for last week … April through June, for most key countries, the base months in 2020 were the lowest base-readings data during the initial Covid-19 wave, meaning that yr-on-yr growth numbers are strongly influenced by the low bases.  Do not be impressed by big positive numbers.   Look instead at recent data relative to pre-covid levels, and trends, as a guide to performance.  
  • Base metal pinch-point graphs remain tight.  Markets are now considering something they have ignored for years … the “fundamentals”, which are carrying more weight than the other market force:  “sentiment”.
  • OPEC+ is considering raising output, which will temper price increases that arise from recovering economies. 
  • Iron ore prices remain high, despite China’s steel output restriction plans.  China’s steel mill capacity utilisation has reduced.   
  • Freight data for Port Hedland (iron ore shipments), Singapore (shipping traffic) and China (freight & passenger segments) broadly show recoveries under way, with various nuances, and that passenger traffic (logically) was much more impacted by epidemics than freight traffic. 
  • Droughts in China (Yunnan province) are impacting production of Al, Zn & Sn due to hydro-power restrictions.  .

SUMMARY  

*Copper  Commodity super cycle on the horizon, and Cu market is tight and needs new identified supply. 

*Cobalt  DRC to put in a floor price for artisanal Co ores.  Co market is growing and prices are stronger.  

*Nickel  Ni prices tracking strong gains in stainless steel.  EV demand is yet to really impact Ni.  It is coming!

*Zinc & Lead  Zn mkt & Pb mkt are resilient.  Droughts in China limiting power available to smelters.

*Tin  Sn prices at all-time record levels.  Strong demand for solder / electronic goods.   Droughts / power.

Aluminium  China power cuts due to droughts, slowing production. 

Gold  Gold price moves attributed to outlook for USA bond yields and CPI. 

*Platinum & Palladium  Demand for PGEs is forecast to rise this year as economies recover (despite advent of EVs).

*Oil  Expectations of growing supply, from OPEC+ and USA. 

*Iron Ore  Iron Ore’s 2-yr bull market is not about to end!   China’s prices are at record highs. 

Shipping  Surging demand for infrastructure-related commodities (and other bulks).

General 

CPI – USA & Aust. USA bond yields, gold price:  A medley of data, some volatile. 

*Port Hedland – Iron ore:  Chinese offtake slowed but ex-China offtake jumped.

*China – Transport:  Freight transport largely recovered.  Passenger transport clawing upward?

*Singapore shipping:  Modest increases for containers, and tankers, not bulk.  Passengers positive.