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Breakaway Mining Research Daily and Weekly Report Summaries 20th - 24th March 2017

24/3/2017

Breakaway Research recently launched a new paid subscription product in February - The Breakaway Mining Research Daily and Weekly Reports

We have summarised the daily market commentary from the Breakaway Mining Research Daily Reports from the 20th to the 24th March 2017. 

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Friday, 24th March 2017

Markets:  Bloomberg report overnight that U.S. stocks turned lower, Treasuries briefly erased losses and the dollar slipped after House Republicans postponed voting on the health-care bill, raising speculation the Trump administration’s pro-growth policies will face hurdles in Congress

Commodities:  Interesting developments in the lead and zinc markets. In the lead market, there is speculation that 43,000t of lead could be removed from warehouses and immediately tighten the markets. Some reports suggest that it is due to strong consumer demand but there is speculation that it could be a big trader taking a significant position. Hence the price risk is potentially to the upside.

Elsewhere Chinese imports of zinc fell in February and price continues to gain on signs of a tightening market for zinc. Imports of zinc ore into China fell to 181,767t in February from 223,123t in January and 201,949 yoy and the news suggests that zinc smelters in China may be struggling to buy zinc at acceptable contract prices. Local mine closures and problems with importing suitable ores has led to the closure of some 640,000t of zinc smelting capacity representing around 4.5% of total refined capacity

 

Thursday,23rd March 2017

Markets: DJIA moved sideways as investors continue to assess the prospects for pro-growth policies in America

Commodities:Iron ore futures in China slump extending losses to 8% over the last two consecutive days led by weaker steel prices and record port stockpiles. Prices for the 62% Fe Qingdao CFR material dropped to $87.6/t yesterday, according to Metal Bulletin.

 

Wednesday, 22nd March 2017

Markets:DJIA fell the most since January as investors assess the prospects for Donald Trump’s pro-growth policies gaining Congressional approval. Treasuries climbed with gold

The euro strengthened relative to the US dollar amid easing concern that a populist candidate will prevail in France’s election

Commodities: Oil resumed its slide as U.S. crude stockpiles are forecast to increase

Base metal prices were mixed with copper down as PT Freeport Indonesia reported that the mill at its Grasberg copper mine has resumed operations up to ~40% of capacity, having been down entirely since 11 February.

 

Tuesday, 21st March 2017

Markets:  DJIA moving sideways, and Treasuries advanced as Federal Reserve Bank of Chicago President Charles Evans addressed the timing for further tightening. The dollar remained lower and gold advanced.

The Fed last week raised interest rates and indicated it anticipated another two increases by year’s end. The 10-year Treasury yield fell below 2.47 percent

Commodities:  Nine Chinese smelters are planning to suspend production on the back of low treatment/refining charges, Antaike (China Metal Information Network) said. Estimates point to at least 640kt of capacity to be affected, according to Antaike. Given that the nation produced 6.3mt of refined zinc in 2016 (+7.1%yoy), capacity curtailments add up to a significant share of the market.

 

Monday, 20th March 2017 

Daily Markets:  DJIA slightly down on Friday. Reports that President Donald Trump may begin his overhaul of the U.S. tax code as early as late spring.

Commodities: 
Base metals up on Friday

 

One of the world’s biggest suppliers of lithium Arbemarle Lithium has indicated that it expects demand growth to accelerate through 2021 from 20ktpa to 30ktpa. This compares to a 15-20ktpa increase in demand to 190kt recorded in 2016. The company also states it does not see any “disruptive non-lithium energy storage technologies on the horizon” which would challenge those growth rates. The company is planning to ramp up production at its Greenbushes operations owned in a partnership with Chinese Tianqi in an effort to capture 50% of the market growth in lithium and produce 165ktpa of lithium by 2021, up from current 80ktpa

 

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