Tag: Tariffs

Commodity Review 20181130 by Andrew Pedler – Now Available

Commodity Review 20181130 by Andrew Pedler – Now Available

Global steel production reflects industrial and economic activity.  For October the highlights are a surge from China and more widely, including from “other world”. 

Pinch point graphs for the base metals continue to show tightening markets with reduced exchange inventories, with perhaps the beginnings of price responses.

This week’s comments of particular interest are noted with ‘*’.

SUMMARY  

*Copper  The big guys, FMG, BHP, RIO all increasing focus on copper exploration (and discoveries).

Cobalt  Industrial customers working toward better conditions for DRC miners.

Nickel  Ni market described as tight in China.  Demand increasing.

*Zinc & Lead  Zn: stocks falling, backwardation deepening.  ORN discovery.  Pb – China now a net importer.

Tin  If MIT is right in its findings, there is a slow-burn bull fuse smoking away in the tiny tin market.

Aluminium  Primary Al production will not meet demand in 2019 say Norsk Hydro.

*Gold  The China-USA G20 ‘agreement’ is not so much an agreement as a 90 day ‘ceasefire’.

Platinum & Palladium WPIC increased its forecast for a Pt surplus.

*Oil  USA about to become a net energy exporter.  OPEC and others considering restrictions.

*Coal  Tariffs and Trade-wars:  Jobs are created with fanfares.  Jobs disappear quietly.

Iron Ore  High grade ore premia have been hit hardest in China.

Shipping  Capesize rates rebounded on iron ore and agri-trade.

General 

*World Steel:  Strong growth, particularly a surge in growth from China, and globally more widely.

Commodity Review 20181130 by Andrew Pedler – Now Available

Commodity Review 20181102 by Andrew Pedler – Now Available

SUMMARY  

The constant theme remains that most commodity markets are tight, some very tight, yet markets’ sentiment continues to focus upon the rhetoric, noise and fears of outcomes of USA sanctions, and tariffs, and potential impacts of slowdowns in Chinese growth rates. There is also inordinate attention paid to some spot markets which have very small volumes of material traded, and to not really provide representative prices.

A key question is what catalyst(s) is required for the market(s) sentiment to divert gaze from the noisy froth toward the continually tightening fundamentals?   

Copper  Cu market remains fundamentally tight.  The looming EV surge will just tighten it further.

Cobalt  China’s cobalt metal price fell last week with panic spot sales.  Spot liquidity is very thin.

Nickel  Glencore sees structural Ni deficits continuing.  New Caledonia is to vote.

Zinc & Lead  Spot Zn concentrate TCs increased.  Estimates for Pb deficits have increased.

Tin  There are two tin markets with different participants.  ShFE wants to attract more ‘industry.

Aluminium  Keep an eye on USA-China meetings, the G20 meeting.

Gold  Diwali commences 7th Nov.  USA Midterm elections are 6 Nov.

Platinum & Palladium  Pt production is increasing.

Oil  2nd tranche of sanctions effective 5 Nov.  Though key customers exempted.

Coal  Met coal market appears balanced amidst tight supply.

Iron Ore  China’s winter restrictions begin.  Not all details known yet.

Shipping  Shipping rates down this week.

General 

USA – PMI:  continued strong growth.

USA Construction Spending:  Strong growth.

Japan Industrial Production:  slower growth in last two months.