A declining on-warrant copper inventory means that more metal is being booked for delivery. This is generally associated with stronger demand.
Chinese copper demand is expected to be subdued this year. The current Chinese copper inventory trend is testimony to this fact.
Less Chinese copper demand is negative for copper producers including Agnico Eagle Mines (AEM), Turquoise Hill Resources (TRQ), and McEwen Mining (MUX).
The latest data points reconfirm a negative trend. A slowdown in Chinese real estate demand is bad news for metals such as steel and copper.
China is the world’s biggest automotive market. Chinese auto sales are increasing because the average household is seeing disposable income rise.
Vehicle sales in the US are going strong. US copper demand is holding steady in the automobile sector as well as the appliances sector, thanks to stable consumer confidence.
Copper prices have traded largely sideways in April. Copper prices fell sharply in January but have recovered smartly since then. Year-to-date, copper prices are down ~4%.
The latest European economic data point to a recovery. However, there are still several sectors, such as housing, where demand is weak.
In this series, we’ll discuss recent copper industry indicators. We’ll see how copper prices have done in 2015. We’ll also discuss copper supply trends and demand.
Investors should watch out for any tailwinds or headwinds that could impact Newmont’s costs in 1Q15.
Newmont stated during its 4Q14 earnings call that it is analyzing potential opportunities to pay its liabilities in advance.
Analysts’ sales estimate for Newmont is $1.93 billion for 1Q15 compared to $1.80 billion in 4Q14.
Investors should be aware of two key events for Newmont Mining (NEM): the go ahead for Long Canyon Phase 1 and the renewal of the contract at Batu Hijau.
Newmont Mining is the world’s second largest gold producer. It’s the only gold company included in the S&P 500 Index and Fortune 500.
An interest rate hike would be negative for an asset not yielding any income, leading investors to better interest-yielding asset classes such as equities and bonds.
When spending exceeds earnings, the government borrows money from its citizens and from foreign entities. If this debt accumulates, its currency’s value could decrease.
As US public debt rises beyond a certain point, the federal government must increase taxes and cut spending in productive areas in order to service the interest costs.
A trade deficit means foreign goods are in demand, increasing the demand for foreign currency. This increases long-term outflows of the dollar, leading to its devaluation.
Improving economic prospects for the US should lead to a stronger US dollar, making other investments more attractive, including equities and high-yield bonds.
Wage growth is one of the missing components and could support inflation, which has been anemic and one of the reasons the Fed is deferring its rate hike.