Commodity Review 20181026 by Andrew Pedler – Now Available
China Freight, Industry and Energy, World Steel
The markets’ commentary increasingly flags the polarisation of fundamental factors vs sentiment drivers, that appear to be the dominant forces. What catalyst is necessary for the industry fundamentals to grab the attention of sentiment?
SUMMARY
Copper Sentiment and fundamental conditions for Cu remain poles apart.
Cobalt Glencore resumed output from DRC operations at Katanga.
Nickel Eramet’s New Caledonia operations are struggling, under high costs (and protests).
Zinc & Lead Sentiment & analysts rate Zn’s outlook poorly, though fundamentals are tight. Pb – G1A & TKM. .
Tin Change from last week’s opinion. Now ‘increased difficulty’ in supply from Indonesia.
Aluminium Global aluminium production growth has ground to a halt this year. Outages, alumina (& tariffs).
Gold Bhar is “cautiously bullish” on gold prices.
Platinum & Palladium Amplats’ ouput of Pt increased on improved operations’ performance.
Oil Oil market in turmoil. Sanctions on Iran, China-USA trade war, sentiment. Potential for oversupply.
Coal Metallurgical coal tighter. Indian demand, Chinese port restrictions. Thermal better supplied.
Iron Ore Tightness in the iron ore market looks likely to persist.
Shipping Panamax rates down, while Cape rates stronger.
General
China – Transport: If Freight is a good indicator of economies, China’s growth is not slowing.
World Steel: Continued positive production growth overall, including from China.
China – Industrial & Energy Output: +ve growth for: rolled steel, gas, electricity, air-conditioners, colour TV, Li-batts, plain glass.
USA – Durable goods, Vehicles, Electronic goods. Strong positive growth