20/01/23 -"Re-emerging commodity market frenzy – here to stay?"
After a stellar past few years for commodities – making it one of the best- and consistently-performing asset classes, miners are now facing one of their biggest challenges in recent years, i.e. a recession in the US and Europe. Fortunately, China – which is biggest consumer of most metals – is emerging from the worst of the pandemic. While pricing euphoria is re-gaining momentum as China comes out of its lockdown mess, this could also feed into still-higher inflation and inherent Chinese vulnerabilities (including very high leverage) and, hence, the underlying market optimism warrants a dose of caution. Overall, even though the Metals & Mining sector is perhaps in its best shape (balance sheet-wise) ever to navigate another global crisis, there’s some merit in re-assessing commodity/company exposure(s) as the sector nears the record-highs last seen in 2008.
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