Good afternoon
an article in the FT , written by Martin Wolf, focused on India and it´s economic importance today. India is certainly gaining more importance:
10 years ago, the German GDP was about 3500 bill US$- growth then was worth about 50bill US$ p.a. - today GDP is 3700 bill US$ - growth this year will be worth about 50 bill US$ as well!
10 Years ago, the Indian GDP was about 1200 bill US$ - growth then was worth about 75 bill US$ - today, GDP is about 2600 bill US$ - growth this year will be worth about 180 bill US$!!!!!!!!!
History is repeating itself ( well, sometimes! ) - what we have seen in China we are beginning to see again: The wonderful effects of a strongly rising base effect! We are seeing this currently in coal markets, for example, where India has developed into a major importer.
Well - it´s wonderful for the world economy, and it´s even more wonderful for resources demand - but it´s certainly NOT wonderful for our enviroment!
Factory Orders in Germany weak again - I think it´s very doubtful, that we will reach the official target of 1.5% GDP-growth in Germany this year - we might be lucky and get 1%! No wonder German 10-year bond-yields are approaching ZERO % again!
Equities and metals are not doing much toady - the US$ is slightly stronger, while the A$ has been very weak today pushed down by statement from the Reservebank, that indicate a softening rather than a tightening in 2019! Big change….not that great initially for us Euro-investors, but certainly very positive for Australian mining companies:
Because of the weak A$, the A$ gold price hit a new alltime high intraday at 1853 A$/oz - currently at an extremely healthy 1841 A$!! Even somebody like Gascoyne should be able to make some money this year! This is not to say, that you should buy some - it´s pretty risky and while it´s probably, what one should do, I am awaiting another update in late February. According to the Quarterly, January is shaping up as another bad month, despite a well functioning plant now.
Mineral Resources - reported the price for spodumene for the current Quarter as 791 US$/t - that´s vs 930 US$ in the previous Quarter. I think this number is in line with estimates. The stock has been moving a little over the last few days because of iron ore prices shooting up. As a producer of 10-12 millt this year of 58% iron ore, 10$/t are making a big differnce: From making probably no or little money, to making 100-150 mill - if prices are holding here, which I doubt. In any case - the spike is a welcome hike in earnings, until they ramp up spodumene production further!
Have a nice evening
WS