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Commodity Review 20190719 by Andrew Pedler – Now Available

USA

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • 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.
  • Base metal (industrial metal) trade volumes though exchanges have slowed markedly during 2019, with ‘trade-war fatigue’ and the lack of apparent progress emanating from the USA-China trade talks, which  is affecting the confidence to make decisions and trade in markets.  
  • USA economic data (industrial production, orders to durable goods, housing starts, construction spending) that relate directly to commodities demand, are all showing signs of either slowing or of negative growth.  employment is usually a lagging data series, orders to durable goods and new housing starts are both indicators of confidence that normally lead employment data changes.  The USA Federal Reserve Chairman commented that there is a concern that slowing global economies may impact upon the USA.  Matau’s observations are that the USA economy is already slowing. 
  • The atmosphere at the recent Noosa Mining & Exploration conference was one of high interest levels and measured up-beat outlook, pending or even in despite of world geopolitical risks. 

 

SUMMARY  

*Copper  Chinese CU smelters slashed CU TC/RCs.  Cu mine production growth forecast 2019 is v.slow.

*Cobalt  USA pushed (by local politicians) to investigate Australian miner merge with Canadian miner.

*Nickel  Guatemala to suspend large Ni mines’ production.  WSA to ramp up output due to tight supply.

Zinc & Lead  Yinzhushan – new China Zn-Pb mine.  Analysts cannot agree forecast Zn prices.  G1A high grades.

Tin  SRZ seeking early production from Razorback, upon further drilling and evaluation.

Aluminium  Chinese daily aluminium output records record levels in June.

Gold  USA Fed monetary policy statement due in 10 days.  Au price is up on mkt punts of more rate cuts.

Platinum & Palladium  Sth African Pt miners enter labour negotiations.

Oil  Slowing oil demand growth and a persistent global glut will cap oil prices.

Coal  China import restrictions appear to have been introduced.

Iron Ore  Look to Vale’s Jun19Qtr report next wk for clues for restarting production.  Iron ore prices are high.

Shipping   Cape & Panamax rates up on demand for bulk commodities

General  Port Hedland – Iron Ore shipments:  The export surge continues, with some Brazilian influence.

USA – Industrial Production & Capacity Utilisation:  IP has slow +ve growth. CU is sub-optimal.

USA – New Housing Starts:  growth picked up in June, into +ve levels.

 

Commodity Review 20190308 by Andrew Pedler – Now Available

Commodity Review 20190308 by Andrew Pedler – Now Available

Australia Exploration,  USA

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

Australian exploration spending is recovering, showing confidence in the medium to longer term, despite current geopolitical and sentiment noise.  The world is still looking for resolution to trade and tariff wars, and is starting to look through the noisy rhetoric of political announcements for the likely real impacts.  

This week, analyst comments on China see through the high level PMI numbers, showing that commodities imports are in fact growing.  

Toyota’s thinking on EVs is more commercial than most.

 SUMMARY  

*Copper  China’s imports of Cu ‘concentrates’ at new highs, though import of ‘refined’ Cu dipped.

*Cobalt  Lesson in boom-bust, though the Co outlook remains good.  It is all the timing of supply & demand.

*Nickel  Toyota’s battery philosophy!  INSG forecasts a fourth year of deficits for Ni.

Zinc & Lead  Glencore agreed Zn TCs with subsidiary Noranda Income Fund.  Secondary Pb to be ShFE listed.

Tin  Suspension of PT Surveyor Indonesia has ended, and it is able to export again.

Aluminium  Aluminium Bahrain (Alba) ramping up its line-6 potline.

*Gold  Monetary tightening expectations eased.  USA February jobs data is encouraging (patience).

Platinum & Palladium  Details of the world’s eight largest palladium producers.  Pd price is approaching 2x Pt price !

*Oil  A myriad of factors:  Expect USA to be disciplined by prices, and Saudi & Russia balance the mkt.

Coal  Seaborne HCC prices buoyant.  Thermal negotiations under way.  USA coal shipments hindered.

Iron Ore  China’s iron ore imports at a 10 mo low in February.

Shipping  Cape rates still suffering.  Panamax & Supramax rates are up.

General 

*Australia – Mineral & Energy Exploration:  Mineral & Petroleum spending continued recovery.

*Port Hedland – Iron ore shipments:  Small positive 12 mo growth for yr to February.

*China:  Caixin & NBS PMIs & GDP – Clyde says ‘look at commodity imports’.

*USA – House Starts:  Negative growth though better than December’s fall.

*USA Construction Spending:  slow positive growth but residential spend is down.