China Industry and Energy – USA Durables

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

  • China’s Industry reported lower steel product output and stronger Energy demand, though manufactured products in July had quite mixed outcomes.  This may be related to the proximity to the location(s) of the Beijing Olympics and China’s desire for clean air during the games.  
  • Copper fundamentals remain strong.  
  • USA’s industry seems to have mixed outlooks, with good Durables growth, though poor vehicles demand, and relatively stable demand for electronics.
  • Base metals’ pinchpoint graphs continue to highlight tight markets.  Matau believes such short supply is ill-positioned to feed supply into the strong growth forecasts for uptake (particularly manufacture) of ‘new-energy’ goods.  

SUMMARY  

*Copper  Fundamentals remain intact and there will be growing copper demand ahead.

Cobalt  Fall in China’s Co imports in July due to ongoing issues at Durban port – South Africa.  Not over yet

*Nickel  BSX reported a 375m Ni-sulphide intercept at Ban Phuc in Vietnam.  Development PFS under way.

Zinc & Lead  Chinese Zn smelter outage due to gas leakages.  TC’s for Pb concs up on steep price backw’dn..

*Tin  DRC waiver on export ban for concentrates (which was put in to ‘encourage’ in-country refining).  

Aluminium  Pricing surged on expectations China will curb supply & emissions (at least for Beijing Olympics.

Gold  USA Fed anticipated to reduce bond purchases, with the ‘taper’ to begin later this year.  

Platinum & Palladium  Global vehicle markets facing reduced demand due to covid and disrupted parts supply..

*Oil  OPEC+ expected to continue with plans to revive production despite recent price falls. 

Iron Ore  Global iron ore production growth will accelerate in coming years according to Fitch. 

*Shipping  The dry bulk market has rallied to levels not seen since 2010, though fundamentals have softened. 

General 

*Tungsten:  Outlook for APT demand and prices into Dec21HY is strong.

*China – Industry & Energy Output:  Steel output dropped markedly, though Energy output is up .

*USA Durable Goods:  Durables are strong but vehicles are weak and electronics are flat.