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Friday, 3rd March 2017
Markets: DJIA fell for the second time in 15 days after topping 21,000 for the first time. Gold fell and silver sank as inflation showed signs of accelerating, and Treasury yields rose back toward 2.5%. The US dollar moved higher in its longest winning streak since May.
Commodities: Commodity prices were generally softer. Oil fell to a three-week low as record U.S. crude stockpiles were seen to overshadow OPEC’s efforts to reduce the global surplus. Bloomberg report that Futures declined by as much as 2.2% in New York. U.S. stockpiles increased to 520.2 million, the most in weekly government data going back to 1982. Saudi Arabia continued to lead OPEC’s efforts to cut production, helping the group get closer to a goal set out in a historic accord last year. Output fell to 32.17 m bbl/day in February, a 65,000 bbl/day fall from January, the first month of the agreement
Thursday, 2nd March 2017
Markets: DJIA and FTSE 100 up 1.5%. Resource up overnight in response to generally higher commodity prices. Resource indices down in Australia yesterday
Commodities: Reuters is reporting that there are now signs that a zinc shortage is materializing, with global stocks shrinking and prices for spot metal rising, just as post-holiday demand picks up in China and a strike at North America's second-largest zinc plant further cuts supply. It states that lower mine supply has pushed down treatment charges - the fees that smelters charge to process ore into zinc - to historic lows of around $30 a tonne. Smelters have been staying alive only because they have been able to cash in on rising prices of metal, traders said. "Everyone is scratching around for mine supply. The winners are the guys who mine the stuff, the big diversifieds. The losers are the zinc smelters who are fighting for concentrates," said analyst Daniel Morgan of UBS in Sydney. Korea Zinc Inc said this month it plans to cut its refined zinc production by 7.7% to just under 600,0000 tonnes this year due to low mine supply and reduced treatment charges.
Wednesday, 1st March 2017
Markets: The DJIA stocks edged lower on Tuesday, with investors reluctant to extend the market’s series of records as they looked ahead to a speech by President Trump could determine whether the market’s recent surge will be justified by government policy.
Commodities: Late last week (23rd February 2017) the Financial Times alerted the world to the cause in the recent run in the cobalt price. The article was titled “Electric-car makers on battery alert as hedge funds stockpile cobalt" and outlined that in a bold wager on higher prices, half a dozen funds, including Switzerland based Pala Investments and China’s Shanghai Chaos, have purchased and stored an estimated 6,000 tonnes of cobalt, worth as much as $280 million, according to the investors, traders and analyst sources. The report highlights that the stockpile is equivalent to 17% of last year’s production of the metal. We will expand on this in our weekly and look at the cobalt market.
Tuesday, 28th February 2017
Markets: late comeback on Friday means that the Dow Jones industrial average is riding an 11-day win streak for the first time since 1992, with 11 record closes in a row for the first time since 1987
Commodities: According to LiveWire, big moves on commodity prices overnight resulted in nickel reaching it's previous technical sell signal target and WTI oil breaking below key support. Copper and zinc, which have also previously generated technical sell signals, are yet to reach their minimum downside targets. A negative technical theme remains in place in the metal price / oil sectors (i.e. charting perspective).
Buffet Comments: Billionaire investor Warren Buffett told CNBC on Monday U.S. stock prices are "on the cheap side" with interest rates at current levels. The chairman and CEO of Berkshire Hathaway said he put $20 billion into the market since just before the presidential election. "We are not in a bubble territory" in the stock market, he said on "Squawk Box." If rates were to spike, however, then the stock market would be more expensive, he added.
Monday, 27th February 2017
Daily Markets: Wall Street increased marginally as it had a last-minute move into positive territory after spending most of the session in the red.
A drop in commodity prices, with copper and iron ore recording the biggest falls, followed a report from the US that President Donald Trump’s promised infrastructure programme will not be implemented before the end of 2018. The recent rally in commodity prices has been on the expectations that Trump's promised infrastructure plan would increase demand and boost economic growth.
Macquarie Bank report that the latest Metal Bulletin assessment of cobalt shows pricing at ~$23.6/lb for 99.8% material, up 37% over the course of February to date and 60% from the start of the year. The Banks expects that in 2017 we will see demand from the core portable electronics sector recovering and supply growth relatively stagnant.
This leaves Chinese buyers, with next to no domestic options, scrambling for material from the Democratic Republic of Congo. Meanwhile, the prioritisation of higher-quality battery development by the Chinese government may even open up the coveted new energy vehicle market to greater cobalt penetration