Commodities

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Iron ore has been a clear leader from the early days of the raw materials rally. It is also the most volatile. Volatility is fed by the ongoing trade war between the world's biggest producer of iron ore, Australia and one of the biggest users, China.

China stockpiling of Cobalt has seen it's prices soar, rising by about 65 per cent since January. Cobalt is used in batteries for electric vehicles, as well as smartphones, tablets and laptops. China is the world’s biggest importer of cobalt, buying about 95,000 tonnes of it every year.

Copper prices fell Tuesday to their lowest level in two months on concerns China may intervene on rising commodity prices. Freeport-McMoRan $FCX, the world's biggest publicly listed copper producer has also fallen. The strength in copper had been boosted by a supply constraints, a weaker USD and China's economy.

With inflation popping up everywhere with the US Fed seeing it as transitory while others are not convinced. Commerzbank issued a note Monday raising it's gold price target up to $2,000. Silver to $30 and Palladium to $2,800.

Australian mining giant BHP is in sync to replace diminishing iron ore output from it's existing Yandi mine which is nearing the end of its life. The first ore from its $4.6 billion South Flank mine in the Pilbara, WA was mined this month. 

Dalian iron ore futures are down another 3% over continued concern over new emissions restrictions in the major steelmaking hub Tangshan Today's move follows Friday's sell off as investors optimism soured over Chinese demand. China is the world’s biggest steel producer.

Gold is down over 8% for the year and on target for its worst month since late 2016. This is despite traditional safe haven buy cues such as inflation scares, a weak US dollar, and an uncertain world, Gold bugs climbed into the precious metal after the Fed's massive new stimulus package and talks of Fiat currency collapse. What happened? One thing, Bitcoin took much of that Gold bug clientelle and yields have tracked higher.

The global semiconductor chip shortage, the result of lower production from COVID restrictions and increased demand due to Work From Anywhere (WFA). Then we have a delay in Intel's chips. This has put the Taiwanese Semi giants in a powerful position for upcoming negotiations with automakers. 

Iron ore prices have continued to rise sharply following ongoing Chinese industrial output, Prices for iron ore cargoes with a 63.5% iron content for delivery into Tianjin jumped to $172 per tonne in the third week of January. The highest level since October of 2011. At the same time Rio Tinto saw a 2.4% rise in Q4 iron ore shipments.

Chicago based Hedge fund Citadel has made massive profits on it's commodity investments in 2020, over $1 billion according to Reuters.  Much of the gains were in oil and gas from the price swoons from the Covid demand meltdown, Large gains were also said to be have made in agriculture commodities. 

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