DRC, Japan, USA

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

  • Emergence from the Covid-19 Pandemics around the world is facing some new headwinds. (new variant)
    • Global recovery growth has slowed, though not stalled.   
    • South African doctors who discovered the new Omicron variant stated it appears more contagious, but more benign, than the Delta strain, and that many are over-reacting to a ‘new variant’ without knowledge of its character.  
    • Expect more turbulence and slower actual recoveries. 
  • Base metals’ pinchpoint graphs continue to highlight (very) tight markets.  The prices are responding strongly to low stock levels.  
    • High prices have still NOT drawn additional stocks onto exchanges for: Cu, Zn, Pb, Ni nor Sn.  
      • In fact for most of these stock levels are continuing to decline despite high prices. 
      • Implies very tight markets.
  • New Energy Vehicles’ much touted massive growth rates might grind to a halt in a couple of years if some battery configuration changes do not become available. 
    • Matau believes that the resources industry will struggle to supply raw materials at the optimistic growth rates touted by manufacturers and entrepreneurs.  
    • Actual rates will have to work to actual rates of raw materials supply growth.  That said the critical NEV commodities present some attractive investment opportunities.

SUMMARY  

*Copper  MMG plans to end Cu production from Las Bambas (Peru).  [~2% of global Cu output]. 

*Cobalt  DRC EGC monopoly plans to start buying of artisanal cobalt in January.  

Nickel  Nornickel arranged infrastructure service agreements, with associated Russian parties.  

*Zinc & Lead  Zinc prices are forecast to remain firm over coming mo’s.  Pb-acid batteries to coexist with Li-ion. 

*Tin  Sn prices doubled in 12 mo on tight demand. 

Aluminium  China is running short of Al metal.  NZ’s Tiwai Point Al smelter may extend its life, on high prices. 

Gold  Physical gold demand in major Asian hubs rose this week, on reduced prices. 

Platinum & Palladium  The global platinum market is expected to remain in a surplus in 2022. 

*Oil  Oil price reduced for a sixth week, on fears of Omicron. 

Iron Ore  Iron ore price increased despite sluggish steel mills’ output. 

Shipping  Baltic sea freight indices increased this week, on improved demand, for ships.

General 

*DRC cobalt processing:  Potential to produce Co precursor products cheaper than elsewhere. 

  • This would be a great boost to DRC,  though may depend on how it is funded and controlled, and by whom,

USA – Construction Spending:  Private & Residential spend is strong.  Public & Non-Res is weak.

*Japan – Industrial Production:  Total IP is down a little. Segmental growth varies.

  • Some variations may relate to the computer chip shortages