Tag: shipping traffic

Commodity Review 20191018 by Andrew Pedler – Now Available

Commodity Review 20191018 by Andrew Pedler – Now Available

China

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • China – Industry & Energy output for September was notably widely positive.
  • Singapore shipping traffic is also positive for September …
  • Still …  USA – China tariff talks & trade wars continue to stunt trade oriented decisions.
  • 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.   However low base metal inventories are getting more attention in the media than previously. 
  • USA data for house starts, and IP remain low.  These are concerning.
  • USA yield curves:  … have technically reverted to ‘normal’. 

 SUMMARY  

*Copper  Positive Chinese property and infrastructure growth data improved outlook.

Cobalt  Glencore contract with GEM, & Trafigura financing Mutoshi mine in DRC.  Confident of outlook.

Nickel  Bit of a roller coaster between supply fears and outlook subject to growth rates.

Zinc & Lead  Zn TC/RCs expected to stay high.  South Korea is the third largest producer of refined lead.

Tin  Sn use contracting in 2019.  Changing tariffs are disrupting supply chains.

Aluminium  Energy intensive industry in eastern Australia is subject to commercial reviews.

Gold  Prospect of a Brexit deal is muting Au & Ag price reactions.  (UK votes Sat 19th).  Geopolitics fears are rife.

Platinum & Palladium  Pt surplus ahead, and a Pd deficit .

Oil  Asia-Pacific deficit of refined oils by 2025, while region excluding China likely to face surplus.

Coal  China unlikely to escalate import controls, on fears of a harsh winter & need for economic growth.

Iron Ore  RIO maintains guidance, taking #1 now ranked iron ore producer, pending Vale ramp-up.

Shipping  Cape & Panamax rates reduced.

General 

*Singapore Ship Traffic:  positive growth in each major segment:  bulks, tankers & containers.

Baker Hughes – World & American Rig Counts:

*China – Industrial & Energy Output:  widespread +ve growth incl electricity, but not vehicles.

USA Industrial Production – Capacity Utilisation:  IP growth is flat.

USA – Housing Starts:  low total growth.  Only +ve in the South.

 

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.