Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

All the global equity indices we track reported gains in the past week (orange bars), amid continued optimism of a global economic recovery.

Precious and base metal prices reported gains last week, primarily due to weakness in the US$ from lower yields.  

Week-over-Week (Apr 19, 2021) and Year-over-Year (Apr 19, 2021)

Source: FRC/Various

10 Year Treasury Note

Source: MarketWatchU.S.

Valuations of gold producers were up 7% WoW; base metal producers were up 2%.

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

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

Daily new cases in Germany, U.K., U.S., Colombia, India, Turkey

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

Highly vaccinated nations such as the U.S., the U.K., and Israel, are reporting flat or declines in new cases. 39.2% of the U.S. population has received vaccinations vs 35.6% at the same time last week. This compares to 48.4% in the U.K. (up from 47.3%). We continue to estimate that 50% of the U.S. population will be vaccinated by June.

Share of people who received at least one dose of covid-19 vaccice, April 18, 2021

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

Inventory levels of copper increased again on the LME, and the SHFE (Shanghai). We believe the primary reason for this is continued weakness in China’s manufacturing sector (see chart below).

LME Inventory (Apr 19, 2021)

SHFE Inventory (Apr 16, 2021)

China’s Manufacturing Index

Source: Trading Economics

Our metal price forecasts remain unchanged.

FRC Forecasts

Source: FRC

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-63/