Tag: Chile

Codelco Almost Sold Out of Cu supply on Strong China Demand

Codelco Almost Sold Out of Cu supply on Strong China Demand

  • Top Copper Miner Almost Sold Out on Strong China Demand – Chinese copper demand has been so strong in the past few months that top producer Codelco has almost sold out of supplies for next year, well ahead of schedule, according to the chairman of the Chilean state-owned company.  “It’s extremely strong, not only China. It’s extremely strong around the world,” Juan Benavides, who took over as chairman of Codelco in May, said in an interview in London.  The wave of buying comes as prices have fallen 15 percent this year amid fears that a trade war between the U.S. and China could stifle global growth.  “The trade war is not good at all,” but “demand is strong, inventories are low, supply is not growing as much as demand,” he said.  He sees prices rising above US$3 per pound (US$6,612 a tonne) as demand outpaces supply, reports Bloomberg.

Copper metal exchange inventories currently represent rougnly 1x week’s consumption.  This is fundamentally tight!  However to date sentiment has been focused on fears that the trade wars, tariffs and sanctions would reduce demand for commodities.  China’s behaviour in effectively buying out supply from one of the world’s largest suppliers says that China does not want its growth to be constrained.

BHP has also recently been making very positive outlook statements about the anticipated demand for copper tht may arise from China’s Belt-Road Initiative (BRI).

Commodity Review – 20180928 -by Andrew Pedler – now available

Commodity Review – 20180928 -by Andrew Pedler – now available

SUMMARY  

*Copper  Copper’s current positive internal dynamics are increasingly at odds with its price.  It is not alone.

*Cobalt  DRC cobalt is favoured because of availability, and low As levels.

*Nickel  International consortium looking to produce Indonesian Ni for EV batteries.

Zinc & Lead  Zn Air batteries – developed and in use, for stationary storage.

Tin  ITA forecasts a slowdown In Sn demand growth, due mainly to Chinese growth rate expectations.

Aluminium  Notes at Metal Bulletin’s Aluminium Conference – Berlin.  Tariffs will not solve China’s overcapacity.

Gold  Prices are seeing little reaction & remain below key psychological level of USD 1,200/oz.

Platinum & Palladium  Zimbabwe’s policy changes aimed at attracting investment.  More change may be needed.

*Oil  The OPEC agreement has been well managed.  But, more oil needs to be discovered.

*Coal  Fire at North Goonyella!  South Africa’s new Mining Charter may need further revision(s).

Iron Ore  Chinese policy of shutting inefficient polluting mills drives demand for high grade feed materials.

Shipping  Panamax rates up while Cape rates flat, ahead of China’s October week holidays.

General 

*South American Exchange Rates:  Chile, Peru, Argentina, Brazil.

*Base Metal PinchPoint graphs:  Inventories continue to reduce (except Sn).

*World Steel:  Healthy August yr-on-yr and 12-month yr-on-yr growth.

*Seaborne Coking Coal:  Australia dominates seaborne coking coal supply but patterns are shifting.

USA – Durable Goods, Vehicles, Electronic goods:  strong positive growth.