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ECONOMIC OVERVIEW January 2019
Ambition & Recovery

2018 was a year of ambition and recovery, where even an escalating trade war and threatened economic uncertainty couldn’t prevent producers from making big plans. While Brexit, NAFTA, the US-China trade war and fears of a global economic slowdown dominated the news cycle, resource markets—particularly those in East Asia—got on with the business of growing and adapting. The IMF’s 2017 global GDP growth estimate for 2018 was pinpoint-accurate at 3.7%, a rate that is expected to remain steady in 2019.

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ALUMINIUM January 2019
2018: Year in Review

The aluminium market saw an eventful 2018. Prices had been easing to below US$2000/t early in the year as supply returned from China’s 2017 winter curtailment polices, before surging in April to ~US$2600/t, a level last see seen in July 2011. While remaining over US$2200 over the middle of the year, prices have since retreated to sub-US$2000/t.

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COBALT January 2019
2018: Year in Review

2018 represented a rollercoaster ride for cobalt prices. The first half of the year saw a rate of increase not seen since early 2017, peaking mid-year before rationalising in the September Quarter. July saw prices sink 13% month on month to US$70,792/t on weak seasonal demand. Cobalt price continued this downward trend—falling at a rate more rapid than the first half’s rise—before bottoming out at US$55,000/t in August.

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COPPER January 2019
2018: Year in Review

Despite macro worries, optimism for copper producers can be seen in new development and acquisitions. In the September Quarter, mine construction starts were announced for Anglo American’s 300ktpa Quellaveco, Minsur’s 90ktpa Mina Justa, Nevada Copper’s 24ktpa Pumpkin Hollow and Baikal Mining’s 130ktpa Udokan.

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IRON ORE January 2019
2018: Year in Review

Two themes were prominent in 2018: approval of new mines to replace the rapid depletion of ore reserves as production accelerated over the last decade on Chinese demand, and re-starts of idled projects in anticipation of increasing demand for higher grade iron ore.

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LNG January 2019
2018: A Year of Financial Preparation

After record 2018 trade volumes in key global markets of Europe and Asia, 2019 is promising to be the year of the “Final Investment Decision” (FID) for liquefaction projects in Africa, North America and Oceania. Thus, if 2019 is the year of the FID, then 2018 was surely the year of the pre-FID, with players lining up permitting and commercialisation requirements in preparation for the key sanction announcements that will represent a massive wave of new capacity.

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METALLURGICAL COAL January 2019
2018: Year in Review

2018 was a roller-coaster year for the internationally traded metallurgical coal market, with several supply-related events and fluctuating Chinese demand significantly impacting prices. The spot price for premium HCC started 2018 at around US$262/t, declining steadily throughout the March Quarter as port congestion at Queensland’s Dalrymple bay began to ease and support the key metallurgical coal-producing region of Queensland, Australia.

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NICKEL January 2019
2018: Year in Review

If we described 2017 as a year that saw a “false dawn” for nickel (and we did), it would be only fair to describe 2018 as a year that saw an actual dawn, where high demand ensured that even the low-end of the December Quarter price dip was still comfortably above the average 2017 price.

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OIL & GAS January 2019
2018: Year in Review

2018 was book-ended between ExxonMobil’s 6th discovery in Guyana in January and its 10th discovery in December, to close out the year at 5.1Bboe of resources. 2018 was also the year that culminated with the USGS’ stunning declaration that the Delaware sub-basin’s (Permian) Wolfcamp Shale and Bone Spring formation in West Texas and New Mexico represented 46Bbbl of oil, 7.96Tcm (281Tcf) of gas and 19.9Bbbl of condensate; it was described as the largest continuous oil and gas resource ever assessed and offers a long-term vision of industrial-scale wellfields and 70 years of drilling activity.

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OIL REFINERIES January 2019
2018: Year in Review

2018 was a year of ambitious refinery projects, with the overall direction of refinery development suggesting a much more focused approach towards the long-term export of refined products, and chemicals by major oil producers.

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STEEL January 2019
2018: Year in Review

Global steel prices were relatively strong over 2018 despite major trade headwinds in the second half of the year. Persistent Chinese demand, government stimulus and the continued rationalization of China’s steelmaking capacity supported domestic prices throughout 2018 before the trade dispute with the US affected manufacturing growth and steel prices in the second half.

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THERMAL COAL January 2019
2018: Year in Review

The total Chinese thermal coal consumption between January and October 2018 was 2.63Bt, up just 1.6% year on year. Therefore, as import restrictions are likely to remain through 2019, AME expects thermal coal prices will remain flat with a slight decrease during the year.

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ZINC January 2019
2018: Year in Review

In 2018, the global finished zinc market started off with a positive outlook for the year, with prices rising continuously rising to a historic high of US$3,594/t (US1.63/lb) in mid-February. However, the beginning of global trade disputes—especially between the US and China—started to shake investors’ faith in the commodity market, causing finished zinc prices to retreat to around US$3,100/t (US$1.40/lb).

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