Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Five of the seven global equity indices we track were up WoW.

Current Vs Pre COVID-19 (as of May 31, 2021)

Base metal prices reported strong gains last week, primarily due to a significant reduction in inventory levels on the SHFE (Shanghai). China’s manufacturing activities had picked up in April after declining for four consecutive months. Last week’s inventory draw-down suggests that China’s manufacturing activities remain strong.

Week-over-Week(May 31, 2021) and Year-over-Year(May 31, 2021)

Source: MarketWatch 

LME Inventory (May 31, 2021)

SHFE Inventory(May 28, 2021)

Source: FRC/SHFE

Valuations of gold producers were unchanged WoW; base metal producers were up 3% due to stronger prices.

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

Except Argentina and Colombia, all of the top 15 hardest hit nations reported flat or WoW declines in new COVID-19 cases three weeks in a row. 56.9% of Canada’s population has received at lease one dose vs 52.0% at the same time last week. This compares to 50.1% in U.S. (up from 49.0%) and 57.8% in the U.K. (up from 56.1%). 5.3% of Canada’s population is fully vaccinated vs 37.3% in the U.K., and 40.4% in the U.S. Health Canada has stated that restrictions could be lifted when 75% have at least one dose, and 20% have their second dose. At current rates, we suspect this could happen by August 2021.

 

Share of people who received at least one dose of COVID-19 vaccine, May 30, 2021

Source: Official data collated by Our World in Data

Share of people vaccinated against COVID-19, May 30, 2021

Source: Official data collated by Our World in Data

We are raising our forecast for gold, while maintaining all other price forecasts. With rising inflation expectations, and the U.S. Fed showing no signs of raising rates this year, we expect gold and silver to be stronger in H2-2021 vs the first half.

FRC Forecasts

Source: FRC

Weekly Mining Commentary

Author: Sid Rajeev, Head Of Research

Source: https://www.researchfrc.com/weekly-mining-commentary-69