SUMMARY

General   Mineral exploration expenditure in Australia for the Dec 13 Qtr was down 33% yr-on-yr.  Petroleum exploration expenditure was down 21%.  Exploration expenditure has slowed substantially, almost to 2008-09 levels.  Confidence needs to be restored, in the outlook for commodity markets, and that politicians will stop changing rules.

Copper  Chinese Cu smelters plan to export metal to achieve higher (than domestic) prices.  This is most likely going to result in LME copper prices reducing to a closer balance with Chinese domestic prices.

Nickel   Indonesian nickel ore export bans may not have as dramatic impact on Ni prices as thought.  Supply from Philippines and other locales will soften absence of Indonesian material, plus the shortages will assist achieving supply demand balance sooner.

Zinc & Lead  Zn inventories causing angst again.

Tin  Indonesian export bans prompted surge in exports of tin in (exempt) solder.

Aluminium  Qld Government rejected bauxite project applications.

Gold  Physical gold demand down in the December 13 Qtr, and in 2013 compared to 2012.

Platinum & Palladium  South African platinum miners’ dispute is no closer to resolution.  The repeated disruption n South Africa is possibly one reason Pt producers agreed to develop a refinery in Zimbabwe.

 Oil  South Korea’s crude imports from Iran spiked, ahead of maintenance.

Coal  Indonesian CCoW’s under threat to change, with the government forcing re-negotiation of terms.  CCoW’s are not the robust contracts that they used to be.  Weak sentiment drove thermal coal prices lower, except in the Atlantic.   Contract negotiations for JFY thermal coal and June Qtr met-coal are under way.

Iron Ore  Chinese traders are buying ore, though mills are constrained when buying spot by tight credit.  The government intends to force closure of inefficient mills.  However China’s daily production rates for crude steel picked  up again at the end of February.

Shipping   Capesize rates fell during the week, blamed on a Chinese credit squeeze on steel mills.