Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Six out of seven global equity indices we track returned positive returns last week.

Weakness in the US$ drove mainstream metal prices higher. Once again, copper was the best weekly performer, as inventory levels fell sharply on the LME, and manufacturing activities picked up in China last month. We recently uploaded a video on attractive copper targets on our Youtube channel.

Week-over-Week (May 10, 2021) and Year-over-Year (May 10, 2021)

Source: MarketWatch

LME Inventory (May 10, 2021) and SHFE Inventory (May 7, 2021)

Source: FRC/Various

China Manufacturing PMI

Valuations of gold producers were up 9% WoW; base metal producers were up 12%.

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

For two weeks in a row, India was the only country among the top 15 hardest hit nations to report a WoW increase in new COVID-19 cases. Only 9.7% of India’s population has received a dose of vaccine vs 9.2% at the same time last week. At current rates, we expect India to take 10 more months to vaccinate 50% of its population.

Daily New Cases in the United States, India, France, UK, Argentina, Turkey

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. 45.5% of the U.S. population has received vaccinations (at least one dose) vs 44.0% at the same time last week. This compares to 52.1% in the U.K. (up from 50.8%), and 38.9% in Canada (up from 33.6%). We note that the vaccination rate has declined steeply in countries that have over 40% of its population vaccinated (at least one dose). For example, the U.S.’ weekly vaccination has declined from 4% of its population in April 2021, to 1.5%. This has been the case with the other five countries that have surpassed 40%. We believe the primary reason for this is vaccine hesitancy among a high percentage of the population. We continue to estimate that 50% of the U.S. population will be vaccinated by June. At current rates, we estimate that Germany/France/Italy are expected to reach 50% by July/August. South American countries are expected to hit 50% by October.

Share of people who received at least one dose of COVID-19 vaccine, May 9, 2021

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

We are maintaining our metals price forecasts.

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-66