Resource Stock Review - June 1

On June 1, most of the domestic commodity futures markets closed up. Most of the black ones rose, iron ore rose more than 5%, coking coal and hot rolls rose more than 3%; most agricultural products rose by more than 5%, cotton yarn by more than 4%, peanuts by more than 2%; most energy chemicals rose, soda ash rose by more than 3%, PTA and glass rose nearly 3%; most basic metals rose, and Shanghai aluminum rose more than 2%; precious metals rose by nearly 2%.

On June 1, capital from the domestic commodity futures market flowed significantly into iron ore futures. According to Wenhua Financial data, as of 15:00, the main contract for iron ore futures received a capital inflow of 1,286 billion yuan during the day, making it the commodity futures with the largest capital inflow for the day.

According to Reuters, a senior official at Ikongwe Mine, Botswana's only iron ore mining company, said on May 31 that the company had stopped production due to falling iron ore export prices.

The mine is owned by Vision Ridge Investments registered in Botswana, a subsidiary of India's Yashomann Industries. The mine was put into operation in 2021 as iron ore prices soared to a record high of $240/ton, driven by Chinese demand.

Due to low demand for steel and the slump in China's real estate market, iron ore prices in the global market have now fallen to around 100 US dollars/ton. In the face of high logistics costs, low prices made it impossible to export iron ore from the landlocked country Botswana.

In the first 10 years of use, Ikongwe iron ore has a production capacity of 1 million tons/year, with a grade of 65%. The mine was first shipped to China in September 2021.

Shanshen Iron Ore (3047.HK) closed at HK$16.02, up 4.3%

Cumulative return: 1 week: 8.61% January: 1.71% March: -10.85% June: 9.73% since listing: 115.03%

According to the CITIC Construction Investment Research Report, since May, after the Federal Reserve completed interest rate hikes at the beginning of the month, gold fluctuated adjustments. On the one hand, it was a process of revising the market's excessively aggressive expectations about the pace of the Fed's interest rate cuts after lagging employment data and continued official statements. At the same time, it was also due to the need for technical adjustments near the previous resistance level after previously fulfilling our target for the first half of the year. Employment data is lagging behind. It is expected that in the medium term, the US dollar index will continue to fall under the influence of the US recession and a formal shift in monetary policy. Gold is still on an upward trend. It is expected to rise to around 2,200 by the end of the year. It is still the first major asset class to push forward, and short-term pullbacks can increase gains.

Financial Services Agency, June 1. On May 31, the Colombian branch of China Gold Co., Ltd., a subsidiary of Zijin Mining Holdings, posted a statement on Twitter saying that on May 30, the Buritika gold mine was attacked in a new round. One of the vehicles, the Robojet Alpha 30 model, was cremated, and a hybrid vehicle was burnt down. On June 1, staff from the Zijin Mining Securities Department responded that the attack was mainly some harassment on the periphery of the mining area and had no impact on the overall production system of the mining area. “Currently, the company is in negotiations with the local government in Colombia to further strengthen security efforts.” The staff member said.