reports
- Simon Hunt
Thought for the Day - War or Peace - Trade Confrontation or Negotiatio...
“We are on the verge of a global transformation. All we need is the right major crisis and the nations will accept the New World Order’’. David Rockefeller, 14th September, 1994 ‘’Shortly, the public will be unable to reason for themselves. They’ll only be able to parrot the information they’ve been given on the previous night’s news’’. Zeb Brzezinski.‘’If the American people had ever known the truth about what we Bushes have done to this nation, we would be chased down in the streets and lynche...
- Simon Hunt
COPPER: THE MARKET CONUNDRUM
Abstract: Global growth should slow in the second quarter. Policy makers having finally achieved their objective of getting global synchronised growth are not going to see it disappearing under restrictive monetary conditions. Around mid-year, policy will lurch towards easing. Mills will be one of the first to experience order recovery. Ifwe are right, the world will either be very tight for cathode or totally devoid of stocks especially in China by end-2018. Perhaps at that point the SRB will r...
- Simon Hunt
Thought for the Day - China Notes
“The government will cut red tapes, reduce taxes and slash fees for enterprises’’. State Council Release, 3rd January 2018, reported in China Visit Report 30th January 2018.We will shortly be in China. This note will thus summarise some views that have come our way in recent days.
- Simon Hunt
- Simon Hunt
Our Summarised Views
Abstract: President Trump, together with the US military, are getting close to cleaning out the ‘Deep State’. When completed a more transparent and accommodating foreign policy will be noticeable. Based on the traditional and well-tried global narrow money supply trends, world growth should slow in the second quarter especially in China when government unleashes its Shadow Banking restructuring policies. Short-term market turmoil will be replaced by strong recovery in the second half of this yea...
- Simon Hunt
SOUTHERN AFRICA: IS A WAVE OF NATIONALISM ABOUT TO SWEEP OVER?
Abstract: In a BBC interview in the early hours of this morning the DRC’s Prime Minister stated that mining companies are not paying the taxes due to the DRC government (probably untrue) in answer to a question. This raised our hackles that his answer was a signal that nationalisation of mines in the DRC risks lying ahead. This interpretation is supported by remarks made by the CEO of Gecamines in November that government should control its resources. In Tanzania government has forced mines to g...
- Simon Hunt
CHINA: SHADOW BANKING
‘’The big surprise for most foreign investors will be the extent to which the authorities will clean up the Shadow Banking Sector. A lead to what will be done should be seen during the NPC meeting in March followed by action soon after’’. Simon Hunt, China Visit Report, 13/02/2018
- Simon Hunt
Thought for the Day - Copper Prices Revisited
Abstract: The quiet optimism for copper this year and next is based on supply constraints not the impact on consumption of global synchronised growth. Anecdotally, large fabricators have not seen business as good as is now being experienced for at least twenty years. However, for five main reasons growth is likely to slow during the first five months of this year but should re-accelerate in the second probably extending into 2020 or 2021. Prices should have a correction in the first half; if we ...
- Simon Hunt
AMERICA IMPOSING TARIFFS ETC
Our long-held view has been that if America focussed on a few specific industry sectors rather than an across-the-board levy on imports then this was the political deal discussed quietly between the two presidents. Xi would understand that China would have to give something to appease Trump’s supporters and in return Trump would have to give something to Xi to satisfy China’s leadership. But what?
- Simon Hunt
GLOBAL ECONOMY IN 2018 & IMPACT ON METAL PRICES
Abstract: It will only be later this year that synchronised global growth takes hold. A combination of slowing global real M1, China’s cleaning up its financial sector as well as really tight credit conditions there, together with President Trump likely to sign off the ITC 301 case on intellectual property against China will depress growth in the first half of this year. Metal and other commodity markets will experience significant price corrections. Many of the adverse developments will be unwo...
- Simon Hunt
Copper Price Update
Abstract: By year-end, the world economy will be experiencing its first synchronised growth in a decade. Global IP should rise by 6.5% this year and next. China’s copper consumption should increase by 11.2% this year largely driven by sales of aircons into the lower tiered cities and into the countryside and by a 9% increase in wire rod production. As a result of these two developments global refined copper consumption should increase by 7.5% this year and by at least 4.3% in 2019. The real issu...
- Simon Hunt
THOUGHT FOR THE DAY - China Notes
‘’The size of China’s displacement of the world balance is such that the world must face a new balance. It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world.’’ Lee Kuan Yew ‘’And as Xi rose to the presidency in 2012, among all foreign observers, Lee was the first to say of this largely unknown technocrat, ‘Watch this man’……Lee likened Xi to Nelson Mandela, ‘a person with enormous emotional stability who does not allow his per...
- Simon Hunt
- Simon Hunt
China Visit Report - Part II - Copper
China’s copper consumption is being driven by the powerful new ownership of aircons in the lower tiered cities and in the countryside. Copper used in the aircon industry will rise from 895kt in 2016 to 1.7MT this year and a forecast 2.3MT in 2020. It is also impacted by the continued increase in wire rod capacity which should rise by 9% this year. Foil production for use in PCBs and electric car batteries is forecast to rise by 30-40% a year. Integrated into the copper supply chains is the use o...
- Simon Hunt
China Visit Report : January / February 2018
‘’Some measures (reforms) will exceed the expectations of the international community….Opening up is not only important for China, but also for the whole world…..Further measures to encourage international investors and make the world’s second largest economy more accessible are on the agenda for China at a time when the threat of a full-scale trade war with the USA is rising.’’ Liu He, financial & economic advisor to President Xi‘’The government will cut red tapes, reduce taxes and slash fees f...
- Simon Hunt
Copper Update
We will shortly be in China so will make any revisions to our copper data following our visit. From discussions to date we see no reason why significant changes need to be made.Our optimism for global copper consumption and prices remains undiminished with growth being 3.2% last year and likely to be 3.5% this year driven largely by strong growth in China led by the country’s new phase in the aircon industry’s expansion. The result will be significant world deficits, no matter what happens to la...
- Simon Hunt
CHINA’S 2017 GDP: WHAT DOES IT MEAN FOR 2018
Abstract: We will soon be back in China so a detailed report will be issued thereafter. Nominal GDP, a more useful guide to growth than the reported real GDP, rose to 11.3% last year from 7.9% in 2016. Recovery continued despite a sharp slowdown in the monetary aggregates and in Total Social Financing. This is due largely to the regulators making it difficult for banks to fund the speculative elements of the system. Funds have thus remained within the banking system for households and corporates...
- Simon Hunt
China's Role in the Global Economy
Abstract: Bilateral negotiations rather that confrontation is likely to be the cornerstone of America’s new trade policies. Confrontation would risk America being the loser given China’s significant growing role in the world economy. Over time BRI will replace America as China’s number one export destination. On a PPP basis, China’s GDP accounted for 20% and America’s 14% of global GDP last year. China accounts for a large part of the world’s consumption of iron ore, base metals and oil. Confron...
- Simon Hunt
CHINA: MORE THOUGHTS
Abstract: How China’s economy evolves this year and beyond will be affected by the upcoming American trade policy, where China sits within the global framework and where the country is within its business cycle. The world economy should experience synchronised growth over the next two years anyway which could be temporarily derailed if President Trump signals that America is intent on slowing China’s growth. However, there is much growth that can be accelerated through focusing on the lower-tier...
- Simon Hunt
Thought for the Day - China: Copper - Some Thoughts
Abstract: China is serious about cleaning up the polluted air, water and land. Tough measures against aluminium, copper, steel and other industries will be a permanent feature of the landscape. How much copper smelter production will be affected is too early to state. What seems clear is that most future smelter capacity requirements will be built or bought offshore and will likely cover semi-fabricating also. Copper prices are likely to reach our target or close to it shortly but then to suffer...
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