Archive | Commodity Super-Cycle and Decline

Next decade set to be a serious transition period for mining – report – by Simone Liedike ( – January 21, 2020)

The global mining and metals sector is facing one of its most challenging transitions yet as the industry is considering how it can best position itself to regain and maintain stakeholder confidence on environmental, social and governance (ESG) matters, global law firm White & Case states in its ‘Mining and Metals 2020’ survey report.

According to the report, miners spent 2019 navigating a raft of challenges, with omnipresent concerns about a global slowdown offsetting strong fundamentals.

However, in the law firm’s fourth yearly survey, it asked mining and metals industry participants to share their views for the year ahead. Partners Rebecca Campbell, John Tivey and Oliver Wright co-authored and discussed some of the key findings from the survey report. Continue Reading →

World risks ‘disaster’ as reuse of natural resources declines – by Michael Taylor (Reuters U.S. – January 20, 2020)

KUALA LUMPUR (Thomson Reuters Foundation) – The proportion of raw materials the world is reusing has fallen, researchers said on Tuesday, warning of a “global disaster” as annual consumption of natural resources rose to 100 billion tonnes for the first time.

Just 8.6% of the 100 billion tonnes of materials – including minerals, metals, fossil fuels and biomass – was put back into service in 2017, said a report by Amsterdam-based social enterprise Circle Economy, using the latest available data.

That compares with 9.1% of materials that were used again two years earlier, when annual consumption was 93 billion tonnes, CEO Harald Friedl told the Thomson Reuters Foundation. Continue Reading →

RPT-COLUMN-China’s commodity appetite robust in 2019, undimmed by trade dispute – by Clyde Russell (Reuters U.K. – Janaury 14, 2020)

LAUNCESTON, Australia, Jan 14 (Reuters) – China’s imports of major commodities ended last year with a bang, with strong gains showing the appetite of the world’s largest importer of natural resources remains robust despite the trade dispute with the United States.

The exception was coal, but December’s paltry imports of the polluting fuel were the result of cargoes not being cleared by customs in response to Beijing’s wishes to put a cap on purchases from overseas.

Once again the standout was crude oil, with December imports coming in at 10.78 million barrels per day (bpd), down slightly from November’s record 11.13 million bpd. The total for the year was 10.2 million bpd, up 9.5% from 2018 and the 17th straight year that annual imports have set a record high. Continue Reading →

COLUMN-Base metals hope for manufacturing recovery in 2020 – by Andy Home (Reuters U.K. – January 7, 2019)

LONDON, Jan 7 (Reuters) – Well, at least there was nickel. Looking back on 2019 it was nickel that provided most of the thrills and a fair share of the spills in the base metals complex.

The rest of the London Metal Exchange pack was largely moribund. Full-year performances ranged from up 5% (copper) to down 15% (tin) with aluminium, zinc and lead closing December barely changed from the start of January.

The obvious culprit for such a subdued performance was President Trump, given the pervasive uncertainty generated by the United States’ trade stand-off with China. Continue Reading →

RPT-COLUMN-Commodities 2020? Trump, China bring deja vu, all over again – by Clyde Russell (Reuters U.S. – December 17, 2019)

LAUNCESTON, Australia, Dec 17 (Reuters) – As 2020 approaches, the year ends with the tantalising prospect of a trade deal between the United States and China. Again.

Initial agreement to de-escalate the tariff war between the world’s two biggest economies has been interpreted as a positive for the global economic outlook. But it’s worth remembering that 2018 ended on a similar note – leaving the commodities outlook once again hostage to the whims of Donald Trump and Xi Jinping.

In November last year, the U.S. President and his Chinese counterpart also reached a trade agreement of sorts at the G20 summit in Argentina. That was also touted at the time as major progress to ending the tariff war that started in the middle of 2018. Continue Reading →

COLUMN-China’s imports of major commodities show accelerating trend – by Clyde Russell (Reuters U.S. – December 9, 2019)

LAUNCESTON, Australia, Dec 10 (Reuters) – The growth rate of China’s imports of major commodities has accelerated in recent months, indicating Beijing’s stimulus efforts may be bearing fruit and that the impact of its trade dispute with the United States may not be as bad as feared.

On the surface, China’s imports of major commodities in November presented a mixed picture, with month-on-month gains in crude oil and copper, and declines in iron ore and coal.

But it’s probably more useful to look at the prevailing trends in the year-on-year and year-to-date movements, and here a clearer pattern emerges. Chinese crude oil imports reached a record 11.13 million barrels per day in November and are up 10.5% for the first 11 months of the year compared to the same period last year, customs data showed on Monday. Continue Reading →

COLUMN-U.S.-China trade pendulum swings toward Beijing; commodities key – by Clyde Russell (Reuters U.S. – December 3, 2019)

LAUNCESTON, Australia, Dec 3 (Reuters) – Since U.S. President Donald Trump launched his trade dispute with China one of the best questions to ask in order to assess the current state of the process is who, right now, is more desperate to do a deal.

For most of 18 months or so since the tit-for-tat tariffs began the conventional thinking has been Beijing is more keen to finalise an agreement, given the obvious slowing of growth in the world’s second-biggest economy.

However, the abrupt swing in the Purchasing Managers’ Indexes for both China and the United States, coupled with mounting domestic political pressure on Trump as he heads into his re-election campaign, may have altered the dynamic. Continue Reading →

Changing of the guard as mining’s mini-boom loses steam – by Peter Ker (Australian Financial Review – August 30, 2019)

A three-year boom in prices for some of Australia’s most important commodities is fast losing steam, tempting investors to change horses mid-race.

Saul Eslake was tempting fate. As the keynote speaker for a sparsely attended mining conference during the deathly bottoms of the commodity cycle, the prominent economist’s message did not lift the mood.

”It could well be, in my view, that the commodities boom Australia has just experienced in the last 12 or so years is the last of its kind in human history unless unforeseen technological developments ordain otherwise,” he told Melbourne’s IMARC conference on November 10, 2015. Continue Reading →

Column: Why London Metal Exchange warehouses thrive in the shadows – by Andy Home (Reuters U.K. – July 26, 2019)

LONDON (Reuters) – Investment fund Cobalt 27 boasts on its website that it holds 2,904.7 tonnes of physical cobalt “fully insured and stored in LME-certified warehouses in Europe and the U.S.” Which is curious because the London Metal Exchange (LME) reports only 840 tonnes of cobalt sitting in its entire global warehouse network.

That, however, is metal that has been placed on warrant with the exchange. What Cobalt 27 owns is not on warrant. It could be warranted overnight. It is, after all, already sitting in one of the LME’s 559 registered warehouses.

But because it hasn’t been warranted, it doesn’t get counted as part of the LME’s daily inventory reports. And because it hasn’t been warranted, it’s also subject to a much lower storage charge. Which is, of course, one of the main reasons it hasn’t been warranted. Continue Reading →

OPINION: Mining industry needs investment or metal shortages are inevitable – by Julian Kettle (Woood Mackenzie – July 3, 2019)

Julian Kettle is Vice Chairman, Metals & Mining at Wood Mackenzie.

The time is right for the mining industry to invest in new projects. The fundamentals are clear: we forecast supply gaps across a number of key commodities by 2028.

Investors are understandably concerned that the mining industry will repeat the sins of the past. Meanwhile, macro-economic uncertainty is putting the brakes on project development, and the industry must contend with a widening range of above-ground risks.

But our view is that strong fundamentals mean that investors willing to step up will be rewarded.

Where are the most critical supply gaps? Continue Reading →

COLUMN-The Trump who tweeted wolf: commodities wary of U.S.-China trade news – by Clyde Russell (Reuters U.S. – July 1, 2019)

LAUNCESTON, Australia, July 1 (Reuters) – Have commodity markets reached the point where they are ignoring the tweets and rhetoric on U.S.-China trade talks, and are instead waiting for some concrete developments?

Certainly the initial price action on Monday morning after U.S. President Donald Trump’s latest comments hailing a resumption of trade talks with Beijing was subdued.

The U.S. leader was upbeat after the G20 meeting at the weekend in Osaka, telling reporters that the talks were “right back on track,” before later tweeting that his meeting with Chinese President Xi Jinping was “far better than expected.” Continue Reading →

Trump blows up trade complacency, commodities to feel pain – by Clyde Russell (Reuters U.S. – May 5, 2019)

LAUNCESTON, Australia (Reuters) – U.S. President Donald Trump has just given commodity markets a reminder that stormy waters can blow up quite quickly even if the voyage ahead was looking like smooth sailing.

Investors were becoming complacent with the idea that the U.S.-China trade dispute was heading toward an eminently sensible and mutually beneficial resolution before Trump’s latest Twitter outburst.

Trump tweeted on Sunday that he will raise U.S. tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent on Friday, and threatened to targets hundreds of billions of dollars more in trade. Continue Reading →

Citi Says U.S. and China Will Nail Deal, Aiding Commodities (Bloomberg News – April 23, 2019)

The outlook for commodities is bullish, according to Citigroup Inc., which expects raw materials to be supported by a confluence of positive factors including the agreement of a trade deal between Washington and Beijing, improved demand from China, and a weaker dollar.

The bank’s base case is that the U.S. and China will agree to end their protracted trade fight by end-June, paving the way for tariffs to be lifted, analysts including Ed Morse said in a report. A deal between the two economies is now “on course” for the end of the second quarter, the bank said.

Raw materials have advanced in 2019 aided by gains in energy and metals, with the latest leg up this week driven by the U.S. decision not to extend sanctions waivers for buyers of Iranian crude. Continue Reading →

COLUMN-China’s commodity imports look tepid, may be slightly warmer – Clyde Russell (Reuters U.S. – April 15, 2019)

LAUNCESTON, Australia, April 15 (Reuters) – If you were looking for evidence that China’s economy has lost momentum, you may be tempted to think that you’ve found it in the unimpressive growth, or lack thereof, in imports of major commodities in the first quarter.

Customs data for the first quarter show only crude oil has recorded significant growth in import volumes in the first quarter, with copper data mixed and iron ore and coal dropping.

This would seem to confirm the narrative of slowing growth in the world’s second-largest economy amid the ongoing trade and tariff dispute with the United States. Continue Reading →

Commodity prices, investment poised to extend upswing – by Eric Onstad (Reuters U.S. – March 29, 2019)

LONDON (Reuters) – A rebound in commodities prices and investment is poised to extend in coming months as the sector gets its traditional boost during the final stages of the global economic cycle along with other drivers.

While some investors worry about a possible recession, commodities are due to benefit from an expected U.S.-China trade deal, tightening oil supply and potential short-covering in beaten-down U.S. grain futures.

The 19-commodity Thomson Reuters/Core Commodity CRB Index, which has rebounded 10 percent from an 18-month low touched at the end of last year, should also get further support from easier monetary policy that has lifted all financial markets, analysts and traders said. Continue Reading →