Commodities week in a minute bankruptcy rocks the diamond trade, gold, captain copper is back… eur usd exchange rate live


De Beers has committed to increasing its overall advertising spend this year to $140 million, the highest spend since 2008 cool pictures of nature. Most of the funds will go towards its own Forevermark and DBDJ brands but it is also increasing its partnership marketing with the Diamond Producers Association and the Indian Gem & Jewellery Export Promotion Council, which should benefit the industry as a whole.

Elsewhere, more sombre news as many in the industry return from their summer holidays to the news of one of the largest bankruptcies in recent history. InterJewel, an Indian manufacturer has reportedly defaulted on $100 million of obligations. Whilst the fallout is yet to be fully appreciated, it is clear that with significant obligations in many of the world’s key trading centres, there will be an inevitable domino effect on many, many more companies in the coming weeks.

With plenty of sales kicking off this week including DB, Petra Rio and Gem next week, not many are predicting any fireworks in what could be a subdued period for the industry.

It’s that time again, US jobs data this afternoon and according to Mr French, “Payroll growth has been trending down since mid-2014 with the six month rolling average at 179,000 – Chart of the Day – and we expect a similar addition today name in binary. However in keeping with the PCE data yesterday it is prices, specifically wage growth, which will need to pick up from its range bound level (2.25%-2.5% YoY) to see a more hawkish stance in US monetary policy.”

What a sterling August it has been for base metals, led by zinc and aluminium. Admittedly, over the last couple of weeks I had been of the view that the red metal would stop for a breather but alas momentum remains very much with the bulls at this time pound usd. So in the interest of balance, I will highlight both positive and negative views today.

Elsewhere, Glencore has just agreed new power contracts in Zambia that will see Mopani return to full production, after cutting output by c40% in recent weeks and positively, Freeport looks to be handing over a majority stake in the massive Grasberg operation to the Indonesian government that will see production significantly improve after months of worker unrest, just needs Rio’s approval.

To be fair, bulks have had a fairly quiet week, but the trend of a flight to quality on iron ore remains pertinent. Put into perspective, 65% content is now around twice the price of lower grade 58% content priced at c%55/t gold price 2016. Driven by tighter pollution controls in China and the need for more efficient production, the theme of robust demand for higher quality feed is one that is likely to remain for a significant period of time.

It seems almost like deja vue, but the Association of China Rare Earth Industry (ACREI) has proposed that selling off some of the government rare earth stockpiles to counter the impact of rampant rare earths prices seen since June this year. Largely due to the theory of growing demand in the electric vehicles industry and tightening emission control policies worldwide, we already know this market has a tendency to see huge spikes and then precipitous response.

In July, Chinese FOB oxide prices for neodymium and praseodymium grew by 14% to reach US$42.9/kg and US$54.5/kg, respectively, while the other rare earth prices remained relatively stable rs to us dollar. To date, August has seen an accelerated growth in neodymium and praseodymium oxide prices of 32%. The gain was mostly accounted for in the first two weeks of August and has remained stable thus far during the second half of August.

Following the rapid rise in neodymium and praseodymium oxide prices, other rare earths have since followed suit, especially the price for dysprosium oxide, which has already increased by 21% this month to US$214/kg canadian dollar to usd. Dysprosium can be used as a higher value substitute in permanent magnets.

The price of cerium, yttrium and samarium oxides all grew by around 10% thus far in August, adding to the growing basket price for rare earth mineral concentrates.

Daily company commentary is now covered in our Boom Ore Bust publication (sent by Jamie Campbell, so add him to your contact lists) usd rub exchange rate. I will reiterate some of interesting updates or comments that I feel may have been missed/underappreciated.

At an exchange rate of RUB/$ of 58, TCC and AISC will be towards the upper end of the guidance ranges ($600-650/oz and $775-$825/oz). Spot is currently 59 and we forecast above the range at $631 and $861/oz to ensure an element of flex in our cost forecasts. The company would consider an extended period below 55 as benchmark to revise however the average rate over the last 12 months is 60, equal to co guidance.

Q3 started well and the company and is confident the 1.4MozEq target will be met aud to usd history. FY18 production of 1.55Mozeq was also reiterated as the Kyzyl development project remains on track for production in Q3 2018. (Currently marginally ahead of time and budget). Expect significant contributions from Mayskoye, Svetloye and Omolon

Expected $200m of inventory unwind underway (from stockpiles accumulated over the winter months msn news usa homepage. ND target of $1330m reiterated, we target $1333m and free cash flow for distributions of $220m or ~40p/share implying a ~4% yield, pre-special dividends.

Company budgets for gold at $1,200/oz., therefore making an extended period above $1,300/oz at a time when almost 2/3 of the company’s sales are made underpin earnings and potential distributions.

It felt to us that many of the questions being posed were because the analysts had not been updating their spread sheets and/or were completely unaware of the movement in currency rates usd bookstore hours. We would expect a few notes where forecasts are revised down because of this but overall, from our perspective, everything is as we expected.

The longer gold remains at/around the $1,300/oz the likelihood of another special, on top of the 50% pay-out ratio, increases. We remain very happy to keep this as a buy with an 1166p target price.

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