Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Four of the seven global equity indices reported gains in the past week (orange bars).

Current Vs Pre COVID-19 (as of Mar 29, 2021)

Source: FRC / Various

 Prices of mainstream metals retreated due to a stronger US$, amid rising yields. Copper and nickel prices were also impacted by rising inventory levels.

 


 

Except the U.S., the U.K., and Spain, most of the top 15 hardest hit nations reported a surge in new cases last week.

Daily New Cases in the U.S., India, Turkey, Brazil, U.K., Canada

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

The rollout of vaccines is ramping up across the globe. 28.0% of the U.S. population has received vaccinations vs 24.3% at the same time last week. This compares to 44.4% in the U.K. (up from 40.7%). We continue to estimate that 50% of the U.S. population will be vaccinated by June. Among the top five most vaccinated countries (as a percentage of total population), Israel, the U.K., and the U.S. are experiencing a decline in cases.

Share of People who received at least one dose of COVID-19 vaccine, Mar 28, 2021

COVID-19 vaccine doses administered

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

Inventory levels of copper and nickel increased on the LME and the SHFE (Shanghai). We are expecting downward pressure on copper prices, as inventory levels have increased four weeks in a row.

LME Inventory (Mar 29, 2021)

Source: FRC/Various

SHFE Inventory (Mar 26, 2021)

Source: FRC/SHFE

Due to lower commodity prices, valuations of both gold and base metals producers were down 2% WoW.

Gold Producers

Source: S&P Capital IQ & FRC

Base Metal Producers

Source: S&P Capital IQ & FRC

Gold Producers and base metal producers

Source: S&P Capital IQ & FRC

We remain firm on our outlook for an economic recovery in the second half, based on the rollout of vaccines, and improving consumer sentiment.

U.S Consumer Sentiment and U.S. Unemployment

Source: Tradingeconomics.com | University of Michigan

Our price forecasts remain unchanged.

FRC Forecasts

Source: FRC

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.

companies that announced key developments in the past week

Source: FRC

Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Source: https://www.researchfrc.com/weekly-mining-commentary-60/