Tag: gold

Commodity Review 20191004 by Andrew Pedler – Now Available

Commodity Review 20191004 by Andrew Pedler – Now Available

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • OPEC+ participants are girding their loins for potentially more production cut commitments.
  • The USA – China tariff talks & trade wars continue to stunt trade oriented decisions.  Some unexpected consequences (see tin).
  • Base metal inventories continue to remain tight.  In a broad sense not much has changed.  Base metal prices are struggling to cope with the negative fears driven largely by the USA-China trade tensions.  Low base metal inventories are getting more attention in the media than previously. 

 SUMMARY  

*Copper  Trade wars continue to deter activity.  Outlook for future supply remains tight.

Cobalt  Co inventory from the previously failed Fanya Metal Exchange to be auctioned on Oct 5th.

*Nickel  Ni prices responding to low refined Ni stocks and looming ban on ore exports.

*Zinc & Lead  Northern Canadian infrastructure proposed to deliver remote new mine production.   IBG Citronen.

*Tin  A bad vegetable harvest stings tariff affected USA steel makers.

Aluminium  Vietnam imposes anti-dumping tariffs on Chinee products.

*Gold  “Global policy uncertainty is at an all-time high”.

Platinum & Palladium  Pd prices have run to record highs, on demand growth and supply deficit.

*Oil  Nigeria prepared to make cuts to meet its OPEC+ commitments.

Coal  Chinese buying of low price met coal imports continues.

*Iron Ore  India to auction mining leases.  May disrupt local supply and require imports to balance demand.

Shipping  Cape & Panamax rates reduced this week, on easier grain & iron ore demand.

General 

*Port of Singapore Shipping Traffic:  Bulk Carriers & Tankers +ve growth.

*USA – Construction Spending:  public non-residential spending +ve, but private residential is -ve.

*USA – PMI:  Still indicating a contracting manufacturing economy.

*Japan – Industrial Production:  Overall modest contraction in IP.

Commodity Review 20191004 by Andrew Pedler – Now Available

Commodity Review 20190816 by Andrew Pedler – Now available

USA – Housing Starts, Industrial Production, Electricity End-Use, Bond Yields

Matau’s Comments:  

  • USA   is slowing!  Data this week reinforces last week’s OECD CLI implications.
  • Base metal inventories continue to remain tight.   Most prices are in the ‘nose of pinch-point graphs.  Pinchpoint positions are mostly less than 1 week’s consumption.   However sentiment (geopolitical) continues to drive prices over fundamentals.  
  • Several metals (Ni & Co this week)  are showing signs that reduced supply is likely to lead to higher prices.
  • Outlook is for ‘not enough’ new mine supply in coming years (the next decade), for several key commodities. 

The theme of the Resources Rising Stars conference at the Gold Coast earlier this year is appropriate:  “Pick the stock, not the market”.

 

SUMMARY  

*Copper  Codelco optimistic about long term price for Cu.  Short term prices pressured by growth concerns.

*Cobalt  Co price is up on news that Glencore is shutting its large DRC mine.

*Nickel  Philippines’ largest exporter of ‘high’ grade Ni laterite ore is to shut upon depletion of its Reserves.

*Zinc & Lead  ORN calling for ongoing need for more Zn & Cu production.  Nyrstar Pb smelter stopped again.

*Tin  Trump acknowledges that tariffs increase domestic prices.  Delays new tariffs till after Christmas.

Aluminium  Beijing announced additional import scrap quotas.

*Gold  Gold price gains as faith in Central Banks is about to be tested again.

Platinum & Palladium  Progress … of sorts … being made in wage negotiations with AMCU..

*Oil  .Russia & China have stuck by Venezuela, though that may change.

Coal  A weaker CNY, a safety campaign, shipment restrictions, though premium HCC is preferred.

Iron Ore  Beijing’s stimulus restraint driven by low infrastructure spend, impacting prices.

Shipping  Baltic indices, Cape, Panamax & Handymax up this week.

*General 

Port Hedland – Iron Ore shipments:  Shipments down in July after a bumper June effort.

USA – Electricity End-Use:  Total demand slowing, mostly in residential demand.

USA – Bond Yields:  A historical review + Current 10yr-2yr curves ‘almost’ inverted.  10yr-3mo is!

USA – Industrial Production – Capacity Utilisation: Really slow IP growth.  Cap Util is sub optimal.

USA – Housing Starts:  House starts almost stalled.

Commodity Review 20190726 by Andrew Pedler – Now Available

World Steel and China

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • There is a lot in this week’s issue … reading is recommended.
  • World steel output continues positive growth, supported by expected Chinese infrastructure spending, and despite sanctions / tariffs.
  • Chinese industry and energy output for June reported largely positive growth.  Electricity generation remains strong.  The rise of electricity and natural gas is closely connected in the industrial and residential sectors, as these energy sources provide a good match for the needs of lighter industrial sectors and for a population increasingly concerned about local air quality, according to IEA.  It is estimated that by 2040, the average Chinese household will consume twice as much electricity as today.  
  • Base metal inventories continue to remain tight.  Most prices are in the ‘nose of pinch-point graphs.  Pinchpoint positions are mostly less than 1 week’s consumption.  More media commentary is recognising this condition.  However sentiment (geopolitical) continues to drive prices over fundamentals.
  • The USA Fed meets Wednesday to consider rate cuts.  A 0.25% cut is anticipated, however a 0.5% cut would likely change the USA yield curve back, from inverted, to normal.  Gold bulls are hoping for the latter cut.

 SUMMARY  

*Copper  Concentrates penalised for As content.  TC/RC’s strongly favour ‘clean’ concs.

*Cobalt  International consortium plans large Ni-Co plant at Morowali in Sulawesi.

*Nickel  Recent Ni rally on ‘not news’ easing.  Potential medium term shortfalls for Co, Li, & Ni.

*Zinc & Lead  Qld miners hit by anti FIFO rules.  Neves Corvo Zn expansion delayed and increased cost.

Tin  PT Timah expects to double Sn output in 2019.  … may acquire output of illegal miners

Aluminium  Canadian Al producers benefit from tariffs, USA consumers do not.

Gold  Central Bank Gold Agreement (CBGA) to be discontinued upon expiry.

*Platinum & Palladium  Zimbabwe talking (so far) of unwinding high political risk elements, to attract investment.

*Oil  Natural gas gaining more traction as best on-demand energy production source.

*Coal  Japanese utilities testing off-spec thermal coal products.

Iron Ore  Expectations of Chinese infrastructure stimuli continues to support Fe ore prices.

Shipping  Capesize & Panamax rates slipped this week.

General 

*World Steel:  positive growth continues led by China and other Asia.

Marine Traffic & Port of Singapore traffic:  Tanker traffic +ve, Bulks & Containers -ve growth.
USA – Interest rates, yields:  Fed to consider rate cuts on Wednesday.

USA – Durable Goods, Vehicles, Electronics & Computers: Durables -ve, Vehicles +ve, Elect +ve.

*China – Industrial & Energy Output:  more positive than negative growth items.

Commodity Review 20191004 by Andrew Pedler – Now Available

Commodity Review 20190201 by Andrew Pedler – Now Available

Steel and Gold

Comments of particular interest are noted with ‘*’.

Supply issues continue to abound, keeping some tension in most metals markets.  

While much is made (fears) of slowing Chinese output data, freight traffic (this week) shows material being transported about the country is growing at pace.  Also (see last week’s issue) electricity output/demand continues to grow strongly. 

A new data page has been introduced at the back – your feedback is appreciated.

SUMMARY  

*Copper  Don’t listen to what miners say.  Look at what they do”.  Cu outlook is tight!

*Cobalt  Co sales from DRC delayed further, on government concerns of U-removal technology.

*Nickel  Ni market slowly tightening.  Analysts continue to see deficits ahead.

Zinc & Lead  AZI’s progressing eval’n of Zorzone.  Zn prices high on concerns of weak Chinese refined output.

Tin  Alternative Sn supplies drawn down as Indonesian uncertainty continues.

Aluminium  Chinese smelters alternately are re-opening and shuttering capacity.  Electricity prices becoming an issue.

Gold  Central Bank buying at 2nd-highest levels on record, highest since 1971.

*Platinum & Palladium  WPIC outlook for refined Pt output to grow on increased South African and USA production.

Oil  America is producing the wrong kind of oil, for many refineries, and limiting global heavy oil output.

Coal  China’s import controls disrupting only Australian coal, so far.

*Iron Ore  Iron ore market forecast to move into deficit this year on Brazilian supply issues.  Price up on Brazilian dam breaches.

Shipping  Rates impacted by looming Chinese New Year (5 Feb) and Brazilian dam breaches.

General 

*World Gold Council:  Gold Supply & Demand – Dec Qtr is often a high demand Qtr.

*World Steel:  positive growth continues, for the world, driven by the few.

*China – Freight traffic:  strong growth.  A lot of material is being moved in China.

USA – Construction Spending:  growth is positive, slower, (and more sustainable).

Commodity Review 20191004 by Andrew Pedler – Now Available

Commodity Review 20181123 – USA – by Andrew Pedler

LME metal inventories continue to decrease, tightening base metal markets even more.  A variety of issues are disrupting each of the commodity markets.   

SUMMARY  

*Copper  2018 is turning out to be a surprisingly almost disruption-free year.

*Cobalt  Cobalt supply growth might not be able to keep up with demand growth.

*Nickel  It is easy to wax lyrical about reducing metal content in batteries.  It has to be commercial, & work!

*Zinc & Lead  Zn concentrate demand constrained by disrupted demand from smelters.  Market is still tight.

Tin  Sn solder expected to see boosted demand from ~2022-25 from EVs.

Aluminium  WTO to consider opening investigation into USA’s section 232 Al & steel tariffs.

Gold  Looking toward the G20 summit at end Nov, and potential for agreement between USA & China.

Platinum & Palladium  Zimbabwe continues plans to build a refinery for PGMs & base metals.

*Oil  G20 summit meetings may pre-empt the OPEC meeting in early Dec.  US producers hit by prices!

Coal  China’s port restrictions playing havoc with (spot) trade.

Iron Ore  Falling Chinese steel prices reduced demand for high quality iron ore.

Shipping  Bulk freight rates decline for a fifth week.

General 

*USA TWI – correlations with commodity prices:  Best for gold, and variable otherwise.

USA – Housing Starts:  Down in the NorthEast and South regions in particular.

USA – Industrial Production & Capacity Utilisation:  slowed a bit, but steady growth.

USA – Durable Goods, Vehicles & Electronics & Computers:  growth in durables & vehicles.