Archive | Commodity Super-Cycle and Decline

https://m.miningweekly.com/

Since lockdown measures to contain Covid-19 around the world have eased, ratings and research agency Standard & Poor’s Global (S&P Global) says the reopening of economies, combined with monetary stimulus by banks and governments, has allowed industrial metal prices to rise.

However, even though industrial metal prices have risen from the lows experienced in the first quarter of the year, there remains a possibility of a second wave of Covid-19 infections as lockdowns are eased.

“It nevertheless remains a significant downside risk to industrial metal prices for the rest of the year, despite local supply-side impacts that could provide some price support for particular commodities,” the agency states. Continue Reading →

https://www.reuters.com/

MELBOURNE (Reuters) – Major miners are better positioned to weather the coronavirus disruption compared with previous downturns, having drastically reined in debt-fueled buying and operating costs amid investor scrutiny and pressure.

But smaller players could find themselves adrift as capital dries up. The International Monetary Fund predicted the coronavirus pandemic could cause the steepest downturn since the Great Depression of the 1930s.

An exception will be companies that have already secured tie-ups with majors on development projects, in arrangements that see investment step up if richer veins are found, according to interviews with a dozen industry executives, investors and analysts. But that is just a tiny fraction of the junior market. Continue Reading →

https://uk.reuters.com/

LONDON (Reuters) – Three months can be a very long time in markets, the last three months particularly. COVID-19 has upended the world as we know it, forcing millions of people into lockdown, wiping out global economic growth and triggering a massive government response, most recently in the form of a historic multilateral deal to prop up oil prices.

In the world of industrial metals, the coronavirus has generated an unprecedented demand shock and, as ever more mines close, a lagging supply shock.

Pity the analysts who have to try to make sense of this chaotic world. Unsurprisingly, base metals forecasts have been slashed in the latest Reuters analysts poll relative to January. Continue Reading →

https://www.reuters.com/

MOSCOW/LONDON/MELBOURNE (Reuters) – From using drones for field inspections to stockpiling cyanide, miners are scrambling to maintain output amid the coronavirus pandemic, a task made trickier in underground mines where social distancing is nearly impossible.

The virus has claimed 8,700 lives and infected over 200,000 globally. While miners have faced some outages, due to government shutdowns in places like Peru and Mongolia, most production continues.

In a defensive step, miners have begun stockpiling fuel, hydrofluoric acid, lime and other industry staples, including cyanide, which is used to extract gold from rock. Continue Reading →

https://finance.yahoo.com/

(Bloomberg) — When do you catch a falling knife? That’s what investors in resource-related stocks must wonder after the Stoxx basic resources sub-sector tumbled nearly 10% since the coronavirus crisis escalated in mid-January, and as commodity prices are rebounding today.

Metals and miners have been feeling the heat, as uncertainty mount over the impact on Chinese economic growth and demand for commodities. But as in every sell-off, pockets of opportunity may be emerging.

First, there’s the context: China now accounts for over half of global demand for industrial metals, compared to 20-25% in 2003 when the SARS virus broke out, says Hans Guennewigk, a portfolio manager at Consortia Asset Management. But: there’s also what the country might do to limit the economic damage. Continue Reading →

https://www.bloomberg.com/

Private equity firms lost interest in the mining world last year, pumping 75% less money into the sector as they focused more on funding existing investments.

Investments dropped to $500 million from $2 billion a year earlier, according to a report by law firm Bryan Cave Leighton Paisner. That was the lowest amount since the company started tracking the space in 2013.

Private equity poured money into the mining sector several years ago when big producers were forced to shed assets amid a collapse in commodity prices. Continue Reading →

https://www.bloomberg.com/

Don’t underestimate how much industrial stimulus Beijing will inject in the economy to keep growth on-target.

A rampaging epidemic in the country that consumes about half of the world’s metals has to be bad news for mining stocks, right? Investors are certainly making that bet.

The week started with the Bloomberg World Mining Index falling the most in nearly six months, and a six-day losing streak continued Tuesday on expectations that a slowdown in economic activity will cut China’s voracious appetite for commodities.

Australian shares of Rio Tinto Group fell as much as 5.9% when trading resumed after a public holiday Monday, on track for their biggest slide in three-and-a-half years. Those of iron-ore producer Fortescue Metals Group Ltd. slumped as much as 8.7% in early trading. Continue Reading →

https://www.miningweekly.com/

The global mining and metals sector is facing one of its most challenging transitions yet as the industry is considering how it can best position itself to regain and maintain stakeholder confidence on environmental, social and governance (ESG) matters, global law firm White & Case states in its ‘Mining and Metals 2020’ survey report.

According to the report, miners spent 2019 navigating a raft of challenges, with omnipresent concerns about a global slowdown offsetting strong fundamentals.

However, in the law firm’s fourth yearly survey, it asked mining and metals industry participants to share their views for the year ahead. Partners Rebecca Campbell, John Tivey and Oliver Wright co-authored and discussed some of the key findings from the survey report. Continue Reading →

https://www.reuters.com/

KUALA LUMPUR (Thomson Reuters Foundation) – The proportion of raw materials the world is reusing has fallen, researchers said on Tuesday, warning of a “global disaster” as annual consumption of natural resources rose to 100 billion tonnes for the first time.

Just 8.6% of the 100 billion tonnes of materials – including minerals, metals, fossil fuels and biomass – was put back into service in 2017, said a report by Amsterdam-based social enterprise Circle Economy, using the latest available data.

That compares with 9.1% of materials that were used again two years earlier, when annual consumption was 93 billion tonnes, CEO Harald Friedl told the Thomson Reuters Foundation. Continue Reading →

https://uk.reuters.com/

LAUNCESTON, Australia, Jan 14 (Reuters) – China’s imports of major commodities ended last year with a bang, with strong gains showing the appetite of the world’s largest importer of natural resources remains robust despite the trade dispute with the United States.

The exception was coal, but December’s paltry imports of the polluting fuel were the result of cargoes not being cleared by customs in response to Beijing’s wishes to put a cap on purchases from overseas.

Once again the standout was crude oil, with December imports coming in at 10.78 million barrels per day (bpd), down slightly from November’s record 11.13 million bpd. The total for the year was 10.2 million bpd, up 9.5% from 2018 and the 17th straight year that annual imports have set a record high. Continue Reading →