Commodities Comment
Mixed news once more
 Another round of monthly manufacturing purchasing managers’ reports brought
another mixed bag for May. China’s PMI registered a small rise, which was a
surprise since an early provisional report had pointed in the opposite direction.
Japan’s PMI rose for a fifth month in row to post its highest reading since mid-
2011. European PMIs, in contrast, continued to signal contraction but this was
at least at the slowest rate for 15 months. The US PMI, however, unexpectedly
dropped below the 50-point no change threshold for the first time in six months
and to its weakest headline reading since June 2009, encouraging some
expectations that monetary policy will remain very easy for a while yet.

Commodities Comment
Rand boost only temporary for
platinum producers
 A plummeting South African rand (ZAR) has meant South African PGM
miners are receiving a higher price for their metal than might be realised. This
is providing some relief against the cost pressures facing the industry, and
suggests a weaker dollar platinum price. But its bearishness for platinum
should not be overstated. While the rand could fall further, it is mostly for
reasons that would mean lower platinum supply, and in any case we expect
the rand will bounce back by year-end, suggesting only temporary breathing
space for miners.

Commodities Comment
Copper disruptions gather pace; but
still below our forecast
 After better-than-expected copper mine supply earlier in the year, disruptions
have picked up suddenly in Q2. While there is still uncertainty over the duration
of the outage at Grasberg, current expectations of a three-month closure
suggest that we are still comfortably below our full-year disruption allowance,
and thus we still expect our forecast 250kt surplus to be unaffected.
 Secondly we expect that a Force Majeur declaration or third-party purchases
by Grasberg are inevitable in the coming days, as we estimate concentrate
stocks held before the closure were enough to fulfil ~12 days of exports.