Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Four out of seven global equity indices we track produced negative returns last week.

Copper and nickel prices retreated, after reporting five consecutive weeks of gains, as inventory levels of both metals were up on the SHFE (Shanghai).

Valuations of gold producers were up 2% WoW; base metal producers were down 6% due to lower copper and nickel prices.

Gold Producers and Base Metal Producers

Source: S&P Capital IQ & FRC

For the first time in several weeks, all of the top 15 hardest hit nations reported flat or WoW declines in new COVID-19 cases. In India, new cases declined for the first time since early March.

Daily New Cases in the US, India, UK, Italy, Colombia, Iran

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

Highly vaccinated nations such as the U.S., the U.K., and Israel, continued to report flat or declining new cases. 47.1% of the U.S. population has received vaccinations (at least one dose) vs 45.5% at the same time last week. This compares to 53.9% in the U.K. (up from 52.1%), and 45.1% in Canada (up from 38.9%). We were pleasantly surprised by the significant jump in Canada, as vaccination rates in the U.S. and the U.K. had declined after both countries surpassed 40% (due to vaccine hesitancy). We estimate that 50% of the U.S. and Canada’s population will be vaccinated by June. Germany/France/Italy are expected to reach 50% by July/August. South American countries are expected to hit 50% by October. As only 10.3% of India’s population has received a dose of vaccine vs 9.7% the same time last week, we expect India to take 10 more months to vaccinate 50% of its population.

Share of people who received at least one dose of COVID-19 vaccine, May 16, 2021

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

As prices in the first five months have been higher than our estimates, we are raising our 2021 (full-year) average price forecasts for copper, zinc, and silver. Bitcoin prices are down 28% from their record highs last month. We expect the high volatility in bitcoin prices to drive some investors back to gold. Over the past 12 months, we believe bitcoin had been attracting capital away from gold due to bitcoin’s limited supply, and potential to be an inflation hedge.

FRC Forecasts

Source: FRC

In the following section, we review companies that announced key developments in the past week.

Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Source: https://www.researchfrc.com/weekly-mining-commentary-67