Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Global equity indices remained relatively flat last week. 


Among mainstream metals, copper was the best performer, as inventory levels declined for the first time in several weeks. 

LME Inventory (April 26,2021)

Source: FRC/Various

SHFE Inventory (April 23,2021)

Source: FRC/SHFE

Valuations of gold producers were up 1% WoW, while that of base metal producers remained flat.

gold producers

Source: S&P Capital IQ & FRC

Base Metal Producers

Source: S&P Capital IQ & FRC 

Five of the top 15 hardest hit nations (vs eight last week) reported WoW increases in new COVID-19 cases last week.

Daily New cases in the U.S, U.K, Italy, India, Spain

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

Highly vaccinated nations such as the U.S., the U.K., and Israel, continued to  report flat or declines in new cases. 41.9% of the U.S. population has received  vaccinations vs 39.2% at the same time last week. This compares to 49.6% in the U.K.  (up from 48.4%). After a slow start, Canada has recently been ramping up vaccinations;  29.2% of the population has received vaccinations vs 24.0% last week. We continue to estimate that 50% of the U.S. population will be vaccinated by June. At current rates,  Germany/France/Italy are expected to reach 50% by July/August.

We are expecting a correction in copper prices, due to weaker manufacturing  data from China, and as the market is expected to move to a supply surplus this  year (see forecasts below). However, as YTD prices have been well above our full year forecast, we are raising our 2021 copper price forecast from US$3.3 to US$3.5/lb,  while maintaining all other forecasts.

Frc forecasts april 26,2021

Source: FRC

World Refined Copper Usage and Supply Trends

Source: ICSG

China’s Manufacturing Index

Source: Trading Economics

Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Source: https://www.researchfrc.com/weekly-mining-commentary-64/