atans1

Goldie says buy industrial metals

In China, Commodities on 09/02/2019 at 4:30 am

Though global growth expectations have been tempered over the past year based on slowing demand in China and the US, the end of the cycle is not nigh. The fall was from a high base and China’s policymakers are taking corrective action to support demand, Goldman said.

Global growth . . . is still sound in absolute terms, ie it implies demand growth that is above supply growth for the majority of commodities. Meanwhile, the lack of tangible capital expenditure on growth projects means that supply growth across the majority of commodities is negligible. As a result, we remain positive on most commodities overall.

Goldman

If metals prices fall, mining shares should prove resilient as, compared with previous downturns, their balance sheets are stronger and their returns are higher, Goldman said. It also said that a US slowdown would weigh on the dollar, which would be positive for commodity producers, and argued that, with the exception of zinc, supply growth remains scarce.

Its top pick in the sector was Anglo American, with the broker also repeating “buy” advice on BHP and Glencore.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: