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David Fuller and Eoin Treacy's Comment of the Day
Category - Precious Metals / Commodities

    Cobalt price bulls' worst fears may just have been confirmed

    This article by Frik Els for Mining.com may be of interest to subscribers. Here is a section:

    “Because there is only one lithium ion per one cobalt, that limits of how much charge can be stored. What’s worse is that current batteries in your cell phone or laptop typically only use half of the lithium in the cathode.”

    The [Northwestern] fully rechargeable battery starts with four lithium ions, instead of one. The current reaction can reversibly exploit one of these lithium ions, significantly increasing the capacity beyond today’s batteries. But the potential to cycle all four back and forth by using both iron and oxygen to drive the reaction is tantalizing.

    “Four lithium ions for each metal — that would change everything,” Wolverton said. “That means that your phone could last eight times longer or your car could drive eight times farther. If battery-powered cars can compete with or exceed gasoline-powered cars in terms of range and cost, that will change the world.”

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    Recreational pot puts medicinal marijuana on the backburner just as demand explodes

    This article by Geoff Zochodne for the Financial Post may be of interest to subscribers. Here is a section:

    But PwC said in a report earlier this year that some industry stakeholders felt the federal government’s “tight timeframe” for recreational legalization would lead to a lack of consultation and the potential to miss the opportunity to right the medical regime.

    “Because decision-makers will have so little time for regulatory development, the focus will be exclusively on recreational cannabis, to the detriment of changes that may be required for medical cannabis,” PwC warned, adding that changes to the medical regime could be as far away as three years as a result.

    One outstanding problem is that doctors may still be hesitant to prescribe cannabis to their patients, creating a bottleneck in the system for both patients and producers.

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    Copper Rallies to Three-Year High as China Plant Halts Aid Bulls

    This article by Bloomberg News may be of interest to subscribers. Here is a section:

    Copper’s latest leg up follows news that Jiangxi Copper Co., China’s largest producer, had been ordered to stop output for at least a week before a further assessment based on local pollution levels. Earlier in the month, the No. 2 smelter, Tongling Nonferrous Metals Group, was asked to make similar cuts.

    Jiangxi Copper gained 3.4 percent in Hong Kong and Tongling Nonferrous added 0.7 percent in Shenzhen to the highest close since Nov. 9.

    “Copper stocks are rising as investors are bullish on copper prices amid an improving demand outlook from the U.S. and Europe in particular,” Yang Kunhe, an analyst with Pacific Securities Ltd., said by phone from Beijing. “The production cuts are temporary. A one-week halt won’t cause too big a problem for Jiangxi Copper. Smelters can also adjust by moving forward their annual maintenance.”

    This quarter, Codelco said the company’s projections showed a sustained increase in deficits and “we don’t have any reason -- that we know of -- for closing them in the future.” The International Copper Study Group said the global deficit was 181,000 tons in the first nine months of 2017.

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    Brazilian miner Vale says entering new era of big dividends

    This article from Reuters appeared in mining.com. Here is a section: 

    Vale is entering a period in which it plans to pay out big dividends, Chief Executive Officer Fabio Schvartsman said on Friday at an event commemorating the Brazilian miner's inclusion in the Sao Paulo stock exchange's strictest listing market segment.

    "Now is the era of the Vale dividends. Vale will become a big payer of dividends if everything goes well," Schvartsman said, reiterating that a new dividend plan would be released in March, without stating an amount.

    In April Vale paid out 0.905 reais per share.

    Vale shareholders, he said, supported the company in tough times when metal prices were low and now is "Vale's time to pay it back."

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    Bitcoin Tumbles More than 25% as Sharks "Beginning to Circle"

    This article by Samuel Potter and Eddie van der Walt for Bloomberg may be of interest to subscribers. Here is a section:

    Bitcoin dropped to as low as $10,776. It last traded below $10, 000 on Dec. 1, when the U.S. Commodity Futures Trading Commission agreed to allow trading in bitcoin futures. For the week, the decline is as much as 39 percent. That follows gains of 13 percent, 44 percent and 32 percent in the prior three weeks.

    The losses represent a major test for the cryptocurrency industry and the blockchain technology that underpins it, which have rapidly entered the mainstream in recent weeks. Bears cast doubt on the value of the virtual assets, with UBS Group AG this week calling bitcoin the “biggest speculative bubble in history.” Bulls argue the technology is a game changer for the world of investment and finance. Both will be closely watching the outcome of the current selloff.

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    European Metals & Mining - 2018 Outlook

    Thanks to a subscriber for this report from JPMorgan which may be of interest. Here is a section: 

    Sugar industry likely to see record global production of 192m tonnes

    This article from UKRAgroConsult may be of interest to subscribers. Here is a section:

    According to Informa's Agribusiness Intelligence, an industry research and analysis firm, the biggest driver behind the record output this year will be the European Union, India and Thailand.

    Despite this, sugar cane diversion to ethanol production in Brazil means global prices will remain high as the country will produce less sugar in 2018-19.

    Agribusiness Intelligence said that in October, for the first time in more than a year, there was a year-on-year increase in local sales of ethanol of 11% in Brazil. This accelerated to a plus of 16% in the first half of November.

    "The most important reasons for the attractiveness of ethanol versus sugar are: the relatively high price of gasoline at the pump, an advantageous tax structure, recovering fuel demand as the Brazilian economy is moving out of recession and the low sugar price."

    Meanwhile, within the EU, the market is still responding to the scrapping of production quotas for sugar refined from sugar beet, which is creating a huge jump in production. In the EU, 20 million tonnes of sugar will be produced by the end of 2017-18 which is an increase of 3 million tonnes compared to the previous year.

    "This growing trend has not been supported by domestic consumption which has been declining in the EU steadily over the last few years. This will have a direct impact on the trade balance of EU countries, with imports declining and exports could double to as much as 4 million tonnes by the end of 2017-18," the analysis firm added.

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    Supply cuts a 'step change' for uranium price

    This article by Frik Els for Mining.com may be of interest to subscribes. Here is a section:

    The announcement made by uranium giant Cameco in November that it’s suspending operations at its flagship McArthur River mine in northern Saskatchewan and surprisingly deep three-year cuts by Kazakhstan’s state-owned Kazatomprom provide a "step change" for uranium prices says a new report on the sector from Cantor Fitzgerald equity research.

    On Monday, the world largest producer of uranium, surprised the beleaguered market with a larger than expected cut to production of its own.

    Two weeks ago, Kazakhstan’s state-owned Kazatomprom announced intentions to reduce its output of U3O8 by 20% or 11,000 tonnes (around 28.5m pounds) over the next three years beginning in January 2018. According to the company roughly 4,000 tonnes will be cut in 2018 alone "representing approximately 7.5% of global uranium production for 2018 as forecast by UxC."

    Cameco's shuttering of McArthur River for ten months is expected to reduce production by 13.7m pounds in 2018 translating to a combined 42.3m pounds of expected production that has been removed from the market. In 2018 alone, the reduction will be about 24.1m pounds of U3O8 or about 15% of Cantor Fitzgerald's prior forecast of 158.4m pounds of output.

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    Platinum Outshines Palladium on Prospect of Europe Diesel Demand

    This article by Luzi Ann Javier for Bloomberg may be of interest to subscribers. Here is a section:

    “Car sales are one of the strongest indicators of consumption of raw materials,” said Peter Thomas, a senior vice president at Zaner Group in Chicago, citing the one to two ounces of platinum or palladium that goes into each vehicle.

    “You’ve also got a lot of window dressing going on,” with traders selling palladium to book their gains for the year, and buying platinum, he said.

    Palladium, used mostly in pollution-control devices for gasoline engines, has led gains in precious metals this year by climbing 48 percent. It surpassed the price of platinum in September for the first time since 2001. Gold has gained 9.9 percent in 2017, while silver increased 1.4 percent.

    Supply of platinum will trail consumption by 275,000 ounces in 2018, after being largely balanced this year, the World Platinum Investment Council forecast in November. Mine closures in the second half of this year will have a larger impact on production next year, it said.

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    This is how much copper, nickel, cobalt an electric vehicle world needs

    This article by Frik Els for Mining.com may be of interest to subscribers. Here is a section:

    The London-based research company modelled metal requirements across the supply chain – from generation and grid infrastructure through to storage, charging and vehicles – based on relatively modest penetration of EVs in the total global vehicle market out to 2030.

    According to the study as early as 2020, when EVs would still make up only 2% of new vehicle sales, related metal demand already becomes significant, requiring an additional 390,000 tonnes of copper, 85,000 tonnes of nickel and 24,000 tonnes of cobalt.

    Based on an EV market share of less than 32% in 2030, forecast metal requirements are roughly 4.1m tonnes of additional copper (18% of 2016 supply). The move away from gasoline and diesel-powered vehicles would need 56% more nickel production or 1.1m tonnes compared to 2016 and 314,000 tonnes of cobalt, a fourfold increase from 2016 supply.

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