State of the Market: Mining Q4-2019 + 2020 Outlook Update

The closing months of 2019 again saw large moves among the main globally traded metals as the bearish tones of the third quarter began to stabilize somewhat. Chinese PMIs saw a degree of recovery, with some industrial indicators such as automobile production, while goods and data from the China Electricity Council all coming in with positive figures. The mid-December announcement of a possible trade deal signing between the U.S. and China caused metal prices to rally in the closing weeks of the year after general weakness. Meanwhile, nickel prices fell sharply over the quarter, driven not by fundamentals but the unfolding of Indonesian policy announcements and selling pressure.

Among this heightened volatility, the PAI ended December at its highest level since November 2018 and the aggregate market capitalization of the mining industry rose to just shy of US$1.5 billion. Drilling activity ended the year strongly, and the amount of finance raised by junior and intermediate gold companies rose to a five-year high.

Yet those hoping for a calm start to the new year were disappointed. The phase 1 trade deal signed between the U.S. and China promises some support for industrial commodity demand, yet most tariffs remain and there is still much to resolve in future trade talks between the two countries. The increased regional tensions brought about by the Jan 3rd killing of Qasem Soleimani helped gold prices rise to new multi-year highs, with silver chasing gold and both platinum and palladium continuing their run. The current Coronavirus outbreak has caused much more uncertainty with trade disruptions, fall in oil price and drop in metals demand.

Join us for our Q4-2019 review and hear our updated expectations for 2020:

• Commodity price trends, drivers and estimates
• Drilling activity and exploration metrics
• Mergers and acquisitions
• Quarterly financing activity
• 2020 outlook