Prices are expected to keep on going down over the short term, heavily impacting Zambian and DRC operations. Glencore in particular has invested a large amount of money in almost doubling their production capacity in the Congo and has already begun to cut workers at some operations as margins shrink considerably—the company is also still dogged by a reputation hit after they accidentally shipped radioactive cobalt in 2018. Some producers feel that cobalt prices are near their bottom, but this may be hope, rather than firm analysis.

Oil prices are expected to stabilise after five weeks of drilling rig declines. Bearish factors such as low economic growth expectations, slower manufacturing activities and the US-China trade war are offset by bullish factors, such as shale oil producers' lack of capacity to compete with OPEC procedures and oil removed from the global supply due to the sanctions on Iran.

Asian demand for LNG has fallen short of expectations, particularly for Japan, in which the downturn is attributed to lower imports for power generation—partly driven by the gradual return of nuclear reactors. However, nuclear power reactors that have resumed operations could be forced to temporarily shut down again if back-up safety measures are not in place by specified deadlines under new rules approved by the country's Nuclear Regulation Authority (NRA).

A decrease in metallurgical coal prices continued in July, which fell to their lowest levels this year. Premium hard coking coal prices fell 8% in July to US$182/t, whilst Low volatile PCI coal dropped to US$113/t. Interestingly, semi-soft coking coal prices remained steady during July at US$90/t, a 0.1% decrease from the previous quarter.

Global refining throughput in 2019Q2 dropped 0.7Mbpd year-on-year while June accounted for a 0.9Mbpd year-on-year decline. The downstream sector has seen general activity decline, with the exception of China and the Middle East.

Multiple ports in the Guangxi province in South China have imposed additional custom delays during July—including Qinzhou and Fangcheng, which are two major thermal coal import ports. According to reports, these ports have halted customs clearance for all coal imports following an authority-issued a verbal notice demanding a temporary delay to the import process.

As a consequence of higher iron ore prices, the Chinese pellet premium fell 18% month on month to US$22/t in July, as steelmakers turn away from expensive pellet product and seek cheaper ferrous feed source to cut costs.

The Trump Administration announced that the US will start to impose an additional 10% tariff on an additional US$300bn worth of Chinese goods from September, on top of the US$250bn goods already tariffed at 25%. Global steel prices remain suppressed amid the escalating trade war rhetoric.

Demand for copper has softened due to slower Chinese industrial activities and higher US tariffs on imported goods. China’s manufacturing PMI rose fractionally to 49.9 in July, indicating a continuing contraction of its industry.

After two stable months, nickel prices experienced a significant lift in July to US$13,544/t (US$6.14/lb), registering a 13.1% month-on-month increase. This is primarily the result of the Indonesian government announcing a complete ore export ban in 2022.

As the result of strong supply growth and weak downstream demand, zinc prices are continuing on a downward trend despite of inventory drawdowns at both LME and SHFE. In July, LME refined zinc stocks decreased to 79.4kt and SHFE deliverable stocks also declined down to 35.2kt, registering month-on-month drawdowns of 18.2% and 15.6% respectively.

LME stocks marginally increased over July, increasing 0.04Mt to finish the month at ~1.03Mt. This equates to end-of-month stock cover by LME warehouses of 5.6 days. The trend continues the flattening of stock movements following the persistent decline from the GFC. Large inventories outside LME warehouses may contribute to explain the fall in prices despite tightening of apparent stocks.