Author: Sid Rajeev, Head Of Research

Weekly Mining Commentary

The Nikkei 225 (Japan) jumped 7.7% last week, on news that its Prime Minister will not be running in the upcoming elections. The S&P 500 was down last week due to weaker than expected jobs data. We note that this weakness will likely push the Fed to delay tapering/rate hikes. We continue to believe that corrections in equity markets are likely, when the Fed shifts to a hawkish stance (likely in Q4).

Prices of mainstream metals remained relatively flat. Nickel prices remain highly volatile amid rising demand for EVs, and fluctuating inventory levels.

Source: FRC / Various

LME Inventory (Sept 7, 2021)

Source: FRC/Various

SHFE Inventory (Sept 3, 2021)

Source: FRC/SHFE

Valuations of both gold and base metals producers were flat WoW.

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

Last week, four (three last week) out of the 15 hardest hit nations (including the U.K., U..S., Turkey, and Germany) experienced higher daily new COVID-19 cases. Two countries (six last week) experienced WoW increases in deaths. In the U.S., deaths to daily new cases remains unchanged at 0.75% (0.5% in July) vs 1.5%-2.0% from the highs earlier this year.
Pfizer’s (NYSE: PFE) recent approval has not resulted in higher vaccination rates. Globally, 40.6% have received at least one dose vs 39.3% at the same time last week. 73.9% of Canadians have received at least one dose (previously 73.1%). 67.5% of Canadians are fully vaccinated (previously 66.4%) vs 63.7% in the U.K. (62.6%), and 52.3% in the U.S. (51.6%).

We are maintaining our price forecasts.

FRC Forecasts

Source: FRC

Author: Sid Rajeev, Head Of Research