Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Four of the seven global equity indices we track reported gains in the past week (orange bars), amid continued optimism of a global economic recovery. The U.S. Fed’s Chair, Jerome Powell, stated yesterday that the economy is at an inflection point, with stronger growth and job creation ahead. Tech stocks were impacted this morning, as Mr. Powell indicated that certain assets are over-priced.

Precious and base metal prices remained relatively flat last week.

Week-over-Week (Apr 12, 2021) and Year-over-Year (Apr 12, 2021)

Source: FRC/Various

Eight of the top 15 hardest hit nations continued to report WoW increases in new COVID-19 cases last week.

Daily New Cases in the US, UK, Turkey, India, Canada

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

On a positive note, highly vaccinated nations such as the U.S., the U.K., and Israel, are reporting flat or declines in new cases. 35.6% of the U.S. population has received vaccinations vs 31.8% at the same time last week. This compares to 47.3% in the U.K. (up from 46.4%). We continue to estimate that 50% of the U.S. population will be vaccinated by June. European countries are currently vaccinating 2%-3% of their population per week. As mentioned last week, the U.K’s vaccination rate will be slower this month due to a vaccine supply crunch.

Share of people who received at least one dose of COVID-19 vaccine, Apr 11, 2021

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

Inventory levels of copper continued to increase on the LME, but declined on the SHFE (Shanghai) for the first time in six weeks.

LME Inventory ( Apr 12, 2021)

Source: FRC/Various

SHFE Inventory

Source: FRC/SHFE

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

Valuations of both gold and base metal producers were up 2% WoW.

U.S. Consumer Inflation Expectations

Source: Tradingeconomics.com

FRC Forecasts

Source: FRC

Our metal price forecasts remain unchanged. With rising inflation expectations (chart below), and the Fed showing no signs of raising rates this year, we remain bullish on gold. In addition to gold, we expect nickel prices to be higher by the year-end.

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-62/