As all our German teams kind of evaporated from the Champions League, we Germans loved Kloppi´s fantastic victory with Liverpool last night! He got to be one of the best motivators in soccer, getting everything and more out of his players!
German Industrial Production increased by an unexpected 0,5% in March - though this is a very volatile series,
Chinese exports weaker than expected - imports stronger than expected. Potentially, figures are maipulated for the trade negotiations??
China has increased gold reserves for a 5th month in a row…
A$ gold price back up to 1840 A$….1290 US$…equities weaker, following a stronger start to the day in Europe. Markets still very worried about Trump pokering too high…Well this was the situation just 2-3 hours ago - but as I am finishing, Trump has tweeted again , voicing his believe, that he still sees an agreement as possible - and equities are recovering - gold is retreating…
Vale iron ore production in line with estimates
Codelco produces 29% less copper in the first Quarter, mainly driven by heavy rains during the period.Still, copper is down again today in London - financial players more important for the direction of prices in the short run than fundamentals. A resolution to US/Chinese trade talks should see a big rebound in copper prices.
Northern Star - had a very interesting call with them this morning. Very interesting, what the company is saying and doing about Pogo, their North American aquisition. As we could see in results for the first Quarter, a lot of work to do there, and the company believes, that tehy will need at least 18 month to do all the things they want to do. Generally, and interestingly, productivity of underground mining at Pogo has been dramatically lower than in Australia. The company has initiated a few changes already, with many more to come. Avaiilability of mining equipment has been very poor - that should be an issue largely behind them now. The company is throwing very substantial, human resource at it…currently, 30 Australians are on the ground at Pogo on a 1 month on - 1 month off basis. Reportedly, the North American employees are very proactive…but I am sure, that there will be some cultural clashes. Quite a few of the new employees have also been flown to Australia to look especially at Jundee to understand, how NST are doing things. My impression is, that NST exactly know what they have to do - and that there is substantial upside from them running Pogo as opposed to the previous owner, Sumitomo. It also shows, how much effort you have to put into a new aquisition on a new continent! There are not all that many Australian gold companies having enought depth from a financial as well as management perspective to do this - this point was mentioned by NST, and I think they are dead-right here. The guys who should be able to do this are the obvious ones…certainly just very few…If NST can turn this one around and make Pogo a sustainable producer for 10-15 years at reasonable costs, I think many North American gold producers will wonder what they have done by not bidding for the asset…The jury is out and we will probably not really know for another 9 month or so - but our call really impressed me! I have to say, that a fair share of a Pogo-rerating is probably in the share price already
If you want to play the gold price, I think it´s a good idea to buy some EVN at current levels. With gold creeping back up, EVN should have a very good correlation to gold following the recent consolidation.
Lithium - a lot of talk about it and the other battery metals - but especially lithium, as it is the most market relevant. Livent, the US company and one of the larger players in the end product for the battery producers, came out with a very average Quarterly the otehr day, citing demand weakness for lithium hydroxide. They see lower take-up by some battery producers, as the switch to nickel-intensive batteries, for which producers prefer LiOH. They expect conditions to change only late 2019 / early 2020. So more on the mismatch between current lithirum production, and actual EV car sales. So hard on the heels of the recent Umicore result, another cautious voice for short term pricing! All players remain positive for tzhe longer term, and see the need for incentive pricing to finance new projects, which will definitely be needed - but perhaps rather later than sooner!
Have a nice evening