Author: Sid Rajeev, Head Of Research

Weekly Mining Commentary

Global equity indices hold ground despite rising geopolitical tensions in Afghanistan.

Current Vs Pre COVID-19 (as of Aug 16, 2021)

Source: FRC / Various

Gold prices were up 3.5% as moderate inflation data from the U.S. diminished the likelihood of rate hikes this year. Nickel prices jumped due to inventory declines on both the LME and SHFE (Shanghai), and rising demand from EV batteries.

Week-over-Week (Aug 16,2021) and Year-over-Year(Aug 16,2021)

Source: FRC / Various

LME Inventory (Aug 16, 2021)

SHFE Inventory (Aug 13, 2021)

Valuations of gold producers were down 1%; base metal producers were flat.

Gold producers

S&P Capital IQ & FRC

Base Metal Producers

S&P Capital IQ & FRC

Gold Producers and Base metal producers table

S&P Capital IQ & FRC

Five (six last week) out of the 15 hardest hit nations (including the U.S., the U.K., Italy, Germany, and Mexico) experienced higher daily new COVID-19 cases last week. Seven (four last week) experienced WoW increases in deaths. Deaths to daily new cases are at approximately 0.5% in highly vaccinated countries vs 1.5%-2.0% from the highs earlier this year.

Globally, 31.4% have received at least one dose vs 30.0% at the same time last week. 72.6% of Canadians have received at least one dose (previously 72.0%). 63.9% of Canadians are fully vaccinated (previously 61.9%) vs 59.8% in the U.K. (58.1%), and 50.3% in the U.S. (49.8%).

We are raising our nickel price forecast for H2-2021 amid rising demand from EV batteries. Nickel is the only metal (among base metals) that has lower inventory levels compared to the same time last year.

FRC Forecasts

Author: Sid Rajeev, Head Of Research

Source: https://www.researchfrc.com/weekly-mining-commentary-80