BH rig Counts – Germany

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

  • China’s power constraints and blockading of roads & highways in Peru are impacting the production output of several of the base metals.  (mostly of Cu & Zn +/- Pb).  We believe these events will have temporary effect, but the markets are already tight.
  • The world is progressively recovering from the Covid-19 pandemic.  Increasingly talk is turning to ‘living with covid’, however it appears that many people are not paying attention and are expecting the ‘old normal’ to return.  Epidemiologists caution that we still need to be careful, as there is still much to be learned about the Covig-19 strain(s). 
  • German economic data is showing a recovery in Durable GFoods and Construction, though these data have yet to translate into improved industrial production.  So far it looks like German IP has recovered to the pre-covid downtrend, and has not digested the news of the improving durables data. 
  • 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.
  • Baltic shipping indices report on the demand for shipping, which is at 13 yr highs!  This is not the language the general media is speaking in terms of the global economy …?

SUMMARY  

Copper  Mongolian Govt warns RIO on delays to Oyu Tolgoi.  Peruvian blockades continue.  

*Cobalt  Prices for cobalt intermediate products are expected to lift following China’s Golden Week.    

*Nickel  Despite widespread poorer outlooks, Ni & Sn are expected to fare well on booming EV sales.  

*Zinc & Lead  China power rationing and blockades in Peru are impacting supply of Zn & Pb. 

*Tin  “Another week, another wild ride on the tin roller coaster”.  It is really tight!

*Aluminium  Power shortages are impacting Al smelters in China and Europe. 

Gold  Gold price is trading in a band, with price volatile, but little changed this week. 

Platinum & Palladium  PDI reported notable increases in Pt jewellery sales in the Jun21Qtr.

*Oil  Oil prices surged on tighter supply, at least until OPEC+ increases supply in November. 

Iron Ore  BHP forges ahead with its new South Flank mine despite reported softer outlooks for the sector. 

*Shipping  The Baltic Index, reflecting shipping demand, increased to a 13 year peak.

General 

*Baker Hughes Rig Counts:  Global rig #s recovering from Covid, which made crew logistics hard.

*Germany – Industrial Production:  IP has low growth, the strong growth from Durables has yet to tsfr into IP.