Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

The S&P 500 was up 1% today from the latest stimulus package signed by Trump.  Despite the continued surge in COVID-19 cases in Europe and Canada, six of the seven global equity indices we track were up WoW.  

Current Vs Pre COVID-19 (as of Dec 28, 2020)

Source: FRC / Various

Although the U.S., India, and Iran reported declines in new cases in the past week, most of Europe, Canada, and Mexico continued to experience a surge in cases. The newly emerged, and highly transmissible strain in the U.K. is concerning, but there is no evidence to suggest that the current vaccines will be less effective against the new strain.

Daily New Cases in the US,India,UK,Russia,Maxica,Germany

Source: https://www.worldometers.info/coronavirus/

Commodity prices remained relatively flat in the past week, with WoW changes remaining under 2%.

 Valuations of gold and base metals producers also remained flat in the past week.  

Gold Producers and Base metal Producers December 28,2020

Source:S&P Capital IQ & FRC

Gold Producers companies and Base Metal Producers Companies 2020

Source: S&P Capital IQ & FRC

Inventory levels of copper declined on the LME, but increased on the SHFE (Shanghai), and do not provide any specific insights.

LME Inventory (Dec 28, 2020)

Source: FRC / Various

SHFE Inventory (Dec 25, 2020)

Source: FRC / SHFE

We believe that restrictions are unlikely to be relaxed until there is a decline in new cases. We maintain our outlook, and expect the global economy to recover to pre-COVID levels by mid-2021. We expect base metal prices to be under pressure in the coming weeks based on tight restrictions, and the prior run-up in prices. Our commodity price forecasts (unchanged) are shown below:

FRC Forecasts December 28, 2020

Source: FRC 

Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research