Weekly Mining Commentary

Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Global equity markets continued to rally due to a decline in new cases of COVID-19 in almost all of the hardest hit nations, and continued vaccine rollout. All the seven indices we track reported gains (orange bars).

For the first time, almost all of the hardest hit nations experienced a decline in daily new cases of COVID-19.

11.5% of the U.S. population has received vaccinations vs 9.4% at the same time last week. This compares to 22.5% in the U.K. (up from 17.7%). Israel is at 46%, up from 40%. The U.S. is currently administering over 1.8M doses per day, up from 1.4M in the prior week. We estimate that 50% of the population will be vaccinated by August 2021 vs our previous estimate of October.

Base metals continued to gain strength based on the above-mentioned factors. Gold prices were down 1.4% and is the weakest performer (on a YoY basis) among the mainstream metals. Gold prices typically fall when there is a decline in global economic uncertainties. We expect prices to strengthen in H2-2021, as inflation kicks in from a global economic recovery.

Inventory levels of base metals remained flat on the LME, but increased on the SHFE (Shanghai), providing us mixed signals.

Not surprisingly, valuations of gold producers were down 6%, while that of base metals producers were up 2% last week.

We are not making any changes to our price forecasts, but are reviewing our 2021 projections for base metals based on their continued strength.

 

In the following section, we review companies that announced key developments in the past week. The table below summarizes the changes we made in ratings/fair value estimates/EPS projections of companies under coverage in this report:

Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Source:https://www.researchfrc.com/weekly-mining-commentary-54/