矿工价格评论：2020年展望

1、GlobalResearch5 December 2019EquitiesUBS Global I/O: Miners Price ReviewEquitiesBasic MaterialsGlobal2020 Outlook: Market weight into the New YearBasic MaterialsGlobalUBS View: Market weight as trade tensions keep demand in checkAfter a strong Q1 for the miners (ASX 300 Metals & Mining +20%), the se

2、ctor has traded sideways (+23% YTD) while the ASX 300 is up 24% YTD after +11% in Q1. Escalatingtradetensionssincemid-yearwhichdroveweakerdemandasconsumerssat on their hands, coupled with increased supply from high cost producers, saw commodity prices down from early 2019 highs by as much as +30%. W

3、hilst trade tensions remain unresolved we await signs of wide scale production curtailment & maintain our market-weight call on Metals & Mining.Key Themes: Trade war, global growth & production curtailments15 Dec 19 is shaping up as a pivotal day for commodities and equities as we await whether Pres

4、ident Trump will put previously announced tariffs into effect. Further tariffs are likely to weigh on commodity prices, in particular base metals, while any Chinesestimulusisexpectedtofavourbulkcommoditiesthroughinfrastructurespend. Global growth is still moderating (PMIs 50), albeit China was above

5、 for Nov 19, but thiscouldsimplybeseasonalpostacurtailedOctoberfor70thanniversarycelebrations. Production cuts in coal have begun and with prices below the cost curve for manganese,aluminium&aluminafurthercutscouldbefavourableforpricesin2020.Our top picks: Winter restock favours bulks, while Indo ba

6、n to support nickel We have made only modest changes to forecasts for 2020. We see manganese rebounding into 2020, copper and aluminium higher, but still below long term, while ironoreisseendecliningovertheyearbutstillstrongatUS$80/tin2020.Coaltoseea seasonal bounce through winter, while lithium rem

7、ains a H2 20story.Starting to think about base metals for 2020WehaveNeutralratingsonthebigdiversifiedminers(BHP,RIO,S32,ValeandGLEN) andaSellonAnglo.Thestockslookfairlyvalued,tradinginlinewithNPVandhistorical multiples.Buyratedstocksincl.NST,AQG,FCX,OZL,KAZ,WHC&Ganfeng.Figure 1: UBS Commodity Price

8、Forecasts summary of changesCommodity2019E2020E2021E2022E2023ELT realCopper (US/lb)272(268)275(265)295(285)320(nc)330(nc)295(nc)Alum. (US/lb)81(82)83(85)91(nc)98(nc)100(nc)90(nc)Nickel (US$/lb)6.40(6.43)7.75(7.50)8.00(7.50)8.00(nc)7.50(nc)6.00(nc)Zinc (US/lb)116(114)100(98)95(93)100(nc)105(nc)98(nc)

9、Gold (US$/oz)1392(1406)1600(nc)1650(nc)1650(nc)1600(1650)1300(nc)Brent Oil (US$/bbl)64(64)64(nc)67(nc)70(nc)70(nc)60(nc)IO (fines; US$/t cfr)93(95)80(nc)70(nc)65(nc)62(nc)55(nc)HCC (US$/t fob)179(179)140(nc)145(nc)145(nc)150(nc)135(nc)Thermal (US$/t fob)76(76)70(nc)70(nc)75(nc)75(nc)70(nc)AUD (US)69

10、(69)68(nc)69(nc)72(nc)74(nc)75(nc)Source: UBS Research; nc = no change; iron ore prices 62% Fe equ; thermal & met coal are spot.Glyn Lawcock HYPERLINK mailto:glyn.lawcock +61-2-93243675DimAriyasinghe HYPERLINK mailto:dim.ariyasinghe +61-2-93246386Daniel Morgan HYPERLINK mailto:daniel.morgan +61-2-93

11、243844Joni Teves HYPERLINK mailto:joni.teves +65-6495 6851Daniel Major HYPERLINK mailto:daniel.major +44-20-75683472Myles Allsop HYPERLINK mailto:myles.allsop +44-20-75681693Andreas Bokkenheuser HYPERLINK mailto:andreas.bokkenheuser +1-212-7139516JamesKan HYPERLINK mailto:james.kan +852-29716334Shil

12、anModi HYPERLINK mailto:shilan.modi +27-11-3227302GeorginaFraser HYPERLINK mailto:georgina.fraser +61-2-93242410HugoBravery HYPERLINK mailto:hugo.bravery +44-20-75687202 HYPERLINK /investmentresearch /investmentresearchThisreporthasbeenpreparedbyUBSSecuritiesAustraliaLtd. ANALYSTCERTIFICATIONANDREQU

13、IREDDISCLOSURESBEGIN ONPAGE83. UBSdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbe aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider thisBSlobl/:nesiceviwBSReUBS Research THESIS

14、MAP MOSTFAVOREDLEAST FAVOREDNickel, Manganese, CopperGraphite, Thermal Coal,ZirconPIVOTALQUESTIONSQ:Whatrisksdoweconsiderhighlyunlikely,butnotimpossiblefor2020?Wehighlightafewrisksthatare notinourbasecase,butalsonotoutsidetherealmofpossibility:1) Civil unrest in Chile escalating and threatening copp

15、er mine supply; 2) Simandou FID is reached much earlier than expected and bring new seaborne iron ore supply to market sooner than expected; 3) Water scarcity becomes a significant impediment to mine output an issue that has already received focus for mining operations in parts of Australia; 4) Anot

16、her tailings dam failure bringsaboutanothersupply-shockinasimilarmannertoBrumadinhoandironoremarkets.Q: Will the supply curtailments underway for certain commodities lead to a price response? Yes but it depends on the commodity. We see manganese rebounding into 2020e with high-cost producers cash-ne

17、gative at current prices and exiting the market; well continue to monitor Chinese port stocks as an indicator of market tightness. Similarly, we think that lithium will benefit from a scale-back in production, combined with an anticipated recovery in 2H20 China EV sales growth. However, despite the

18、significant curtailments by Syrah, we are less optimistic on graphite, with synthetic product a strong competitor to natural graphite into the EV battery anode.Q: Which commodities do we prefer heading into 2020?We see manganese rebounding into 2020, copper and aluminium higher, but still below long

19、 term, whileironoreisseendecliningovertheyearbutstillstrongatUS$80/tin2020.Inaddition,thenickel pricenowhasclearerupsideaftertherecentfalls.Goldpriceshaverisksskewedtotheupsideshould macro data continue to deteriorate and/or trade tensions flareup.UBSVIEWNeutralstancemaintained:Wemaintainoursectorwe

20、ightingatNeutraloncontinueduncertaintyin theglobaleconomy.Anunexpectedtradewarresolutionwouldsurprisetotheupside,whileanything less would keep global economic momentum incheck.EVIDENCEWorld Trade and IP deteriorate: World trade and IP output continue to confirm the global slowdown.WHATsPRICEDIN?Trad

21、ewaruncertainty&escalatedgeopoliticalrisk:Fundamentalsstillappeartobesecondaryto (most)basemetals,butshrinkinginventoriesmayexertgrowinginfluenceinto2020e.Figure2:Commoditypriceperformance1-Jan-17=100Figure 3: Global ManufacturingPMIs200150 CopperNickel GoldIronOre(62%FeCFRChina) Thermal coal (Newc

22、FOB) Brent crudeoil65 6055USJapanEurozoneChina1005050450Nov-16Nov-17Nov-18Nov-1940Nov-09Nov-11Nov-13Nov-15Nov-17Nov-19Source: Bloomberg, Platts,UBSResearch.Source: Bloomberg, UBSResearchBSlobl/:nesiceviwBSReOURTHESISINPICTURESreturnFigure4:Worldtradevscopperprice-%y/yFigure5:ChinaFAISpendy/y%YTDCopp

23、er price - %y/y200% Globaltrade(%y/y,rhs)150% Correlation: 0.5730%20%10%0%y/y,YTD ManufacturingReal 30% Infrastructure20%10%-100%-20%0%Sep-89Sep-99Sep-09Sep-19Oct-15Oct-16Oct-17Oct-18Oct-19Source: Blomberg,NetherlandsBureauofPolicyAnalysis,UBSResearch.Source: CEIC, UBSestimates.Figure 6: Base Metals

24、 Days Consumption(Index-Jan-15)Figure 7: China property activity signals - %y/yYTD0CuAlNiZn80%60%40%20%0%-20%-40%SalesStartsUnderConstructionCompleted20152016201720182019Oct-09Oct-11Oct-13Oct-15Oct-17Oct-19Source: LME,SHFE,Bloomberg,UBSestimates.Source: CEIC, UBSestimates.Figure 8: EVChinaSalesFigur

25、e 9: China Iron ore imports ex-top3500% RHS:ChinaEVSales(000unit)% y/y2501620014121501081006504200Ex-Top3RHS:Fe62%cfrChinaUS$/t 140120100806040200Oct-16Oct-17Oct-18Oct-14Oct-15Oct-16Oct-17Oct-18Oct-19Source:ChinaAssociationofAutomobileManufacturers,UBSe.Source: General Administration of Customs, CEI

26、C, Platts, UBSResearch.BSlobl/:nesiceviwBSReGlobalMiningStrategyreturn2020 OutlookAsbackgroundtoour2020outlook,wehavetakenintoconsiderationtheoutlook statementsprovidedbyourglobalmacrostrategistsandourregionaleconomists. Their report can be accessedhere.In summary, 2019 has been a bad year for econo

27、mic data, but a good year for markets so far. Cheap initial valuations and central banks across the world provided a bridge to safety. UBS economists believe that while the data will improvein2020,convalescencewillbeslowerthanconsensusexpects.Policyis likelytoremainstimulatory,althoughincrementallyl

28、essthanthisyear.WherewegofromheredependsimportantlyontheUS-Chinatradedisputeand, as we discuss in this report, we envisage a substantially different global environment, depending on whether things escalate, de-escalate or just move sideways.TheUBSglobaleconomicsteamiscallingforafurtherslowdowninglob

29、algrowth next year from 3.1% to 3.0%. Thats about 30bp below consensus and about 50bp below the IMF (adjusting for their wider forecasting universe). The main reasonfortheirpessimismisthattheirbaselineassumesallannouncedUS/China tariffs are implemented (including the December ones but excluding Octo

30、ber) creating significant weakness over the next 2-3 quarters. By the second half of 2020, UBS forecast global growth back at 3.4%, and then to 3.7% by the end of 2021.Global consumption growth averaged 4.2% in 2017/2018, before slowing to 3.5% this year (2019). UBS forecast it to be unchanged in 20

31、20 at 3.5%. The forecast for 2020 assumes that the US provides the main location of slowing consumption, which is our tariff story concentrated in the retail sector (store closures, unemployment going up 70bp vs no-tariff baseline etc.). Offsetting that are rebounds in India and Turkey.Importantly f

32、or China, the UBS economics team expects higher tariffs and persistent uncertainty should hurt exports and growth, but that additional policy easing should help stabilize growth at 5.7% in 2020e and 5.6% in 2021. UBS believe growth could rebound to 5.8-6% if the December hike is suspended (and theSe

33、ptemberhikeremoved)and6.3%ifalltariffsareremovedbyMarch2020.If allChineseexportsaresubjectto30%highertariffsandtechrestrictionstoughen, UBS see growth dipping to 5.1% in 2020 and 5.5% in 2021.UBSthinkChinawilltoleratesub-6%growthifthereisnoadditionaltradewarde- escalation,soastoavoidaggressivecredit

34、easing,apropertystimulusandrisking medium-term financial stability. UBS expect property policies to remain largely neutral and differentiated, with no significant property stimulus unless property starts and investment fall sharply (not the UBSbaseline).Key ThemesInourQ319PriceReviewwenotedfivetheme

35、sthatwethoughtwoulddominate theminingsectorinvestmentthesis:thecontinuingglobalslowdown,theongoing US-ChinaTradeWar,increasedgeopoliticalrisk,cost-curvesupportascommodity pricesupportandESGinfluencingfundingandcorporatestrategies.While the above themes are likely to remain a dominant feature of 2020

36、, we believeproductioncurtailments,inventoryde-stockingandOPECcompliancewill also be worth following.We explore these themes in more detail below.Global GrowthWhile global growth remains a concern, we question if there are any forward- looking indicators of a potential inflection point for global gr

37、owth as we progress towards 2020. November PMIs have indicated a modest reversal in sentiment(thoughstillincontractionmostly)whilethe2-monthleadingorders-to- inventory ratio could signal a continued lift in sentiment as productivity lifts in order to maintain current demand.Figure10:WorldTradevs.Ind

38、ustrialProductionFigure 11: Global Mfg PMI vs. orders: inventoryratioWorldWorldIPvolumes(importweighted,2005=100,%y/y)15%10%Worldtradevolumes(sa,2005=100,%y/y)1.31.2Global manufacturing - new orders to inventoryratio, 2-month lead60 RHS: Global ManufacturingPMI5%0%1.150-5%-10%1.0-15%-20%0.940Sep-95S

39、ep-01Sep-07Sep-13Sep-19Dec-09Dec-11Dec-13Dec-15Dec-17Dec-19Source: CPB World Trade Monitor,UBSResearchSource: Haver.Inventory de-stockingDuring 2019 many commodity markets suffered from a downshift to apparent demand. While this was sparked by a loss of confidence among consumers and industry, it ap

40、pears this has been exacerbated by destocking of supply chains andinventoryofmetalsandores.In2020e,wereunderlyingdemandgrowthtobe flattish y/y, this would necessitate higher apparent demand for commodities from a lack of destocking. Any lift in confidence, from perhaps a China-US trade deal wouldlik

41、elyinourviewacceleratedemandduetorestockingofsupplychains.Figure12:CopperPricevs.DaysInventoryFigure 13: Aluminium Price vs. DaysInventory16DaysInventoryRHS: Price (US$/lb)1412108642-3.5035303.0025202.50152.00 51.50120Days Inventory RHS: Price Usc/lb)Days Inventory RHS: Price Usc/lb)100908070Nov-14N

42、ov-15Nov-16Nov-17Nov-18Nov-19-60Nov-14Nov-15Nov-16Nov-17Nov-18Nov-19Source: Bloomberg.Source: Bloomberg.Figure14:NickelPricevs.DaysInventoryFigure 15: Zinc Price vs. DaysInventory-1030 Days Inventory RHS: Price(Usc/lb) Days Inventory RHS: Price Days Inventory RHS: Price(US$/lb)8207156105453-18016014

43、01201008060Nov-14Nov-15Nov-16Nov-17Nov-18Nov-19Nov-14Nov-15Nov-16Nov-17Nov-18Nov-19Source: Bloomberg.Source: Bloomberg.Electric Vehicles (EVs)Newcommoditydemandfromelectricvehicleswasakeythemewhichsuggested optimism toward demand of key raw materials in 2018. This theme has been broadlydisappointing

44、in2019.Rawbatterymaterialpricesnamelycobalt,lithium &graphitehaveexperiencedsignificantpricedeclinesandinsomecasesvolumes duetoawind-backofChineseEVsubsidiesandweakconsumerconfidence.The battery supply chain appears to us to be choking on excess inventory from this shift.We maintain that Electric Ve

45、hicles will attain significant market share from ICE vehicles over the next 10 years. Can optimism toward this electric vehicle thematic return in 2020?OurAutosteamthinkthatEVvolumegrowthinChinaisexpectedtopickupagain inH220,andestimatea40%salesCAGRto2025E,reachingoveraquarterof new car sales. It wi

46、ll not be straight forward though and the EV growth story is likelytobemorefluctuatingthansomeinvestorsmayexpectdrivenbyfactorssuch astechnologyprogress,costdecline,newproductlaunches,consumerattitudes, charging infrastructure roll-out and ride-on-demand servicetrends.Figure 16: China EVRHS:ChinaEVS

47、ales(000unit)% y/y25020015010050-100%Oct-16Oct-17Oct-180Source: China Association of Automobile Manufacturers, UBSe.Returns vs. Investment?2019 was characterized by strong shareholder returns as companies looked to return excess cash to shareholders now that balance sheet repair wascomplete. Highpay

48、outratios,specialdividendsandbuy-backsbeingthefavouredmeansof returns.Looking into 2020 balance sheets remain strong, but FCF has come off as commoditypriceshavefallenovertheyear.FCFyieldsarenowinthemidtohigh single digits versus double digits earlier in 2019. But capex spend remains constrainedpart

49、icularlyamongstthe majorminersandwecontinuetoexpectthe majority of FCF generated will be returned toshareholders.Looking at specific companies, Rio is likely to favour dividends to return excess cash given the Chinalco position on the share register (approaching the 15% agreedceiling),whileBHPmayloo

50、ktocommenceabuy-back.Anglo,GLENand S32 are all expected to top up their existingbuy-backs.Production curtailments to increase?A number of commodities are now trading below marginal cost (coal, alumina, aluminiumandmanganese)andwearebeginningtoseeproductioncurtailments. While this is not expected to

51、result in a rapid rise in price, it should prevent the lows of 2015 from being reached.In coking coal, US producers have begun curtailing production (CRN as an example), while we would expect to see high cost trucking drop out of the manganese market in South Africa.Onapositivenotewearealsoseeingdis

52、ciplinedsupplyinmineralsandswithIluka and Tronox electing to stockpile zircon rather than flood the market. While this hasntstoppedpricesfromfalling,webelieveithaslimitedthedownside.Will OPEC maintain cuts through 2020?In December 2018 OPEC agreed a 1.2Mbpd cut to global supply through to end March

53、2020. This has seen inventory draw through 2019. With OPEC to meet in Vienna in early December it increasingly looks like the group will extend the current 1.2Mbpd cut through to at least end 2020. Continuing OPEC+ production levels seen over the 3Q19-4Q19 with better compliance from quota over- pro

54、ducers (eg, Iraq, Russia) would imply a balanced 2020.Our central (admittedly narrow) case suggests to us that oil prices in 2020 will average 2019 with a looser 1H and tightening 2H, especially as the US slows amid FCF focus, tightening capital markets, and reduced productivity gains.ESG an increas

55、ing influence over corporate strategyIt appears that investor decisions are increasingly made with respect to environmental,socialandgovernance(ESG)criteria.Whetherself-imposed,orat the behest of their clients, investors we talk to see this as only becoming more prevalent in the industry.So, what do

56、es this mean for our sector?Costofcapitalfor(mainlythermal)coalequitieswillincreaseasinvestorsdemand ahigherreturnforinvestinginacommoditywithinasupplychainthatcontributes significantlytocarbonemissions.Further,theValedamdisastercalledonceagain forincreasedfocusonminerstailingsdammanagementprograms.

57、Miners are being proactive in their response to the growing significance of ESG. These include South 32s exit from SA Coal followed by Rios coal exit back in 2018 divestment decisions that were made (among other reasons) to increase investibility from an ESG perspective. We expect BHP, Anglo America

58、n and Glencore to provide guidance on the future of their coal assets in 2020.Stock View Maintain Market WeightIn our Commodity & Strategy review of 26 September 2019 (note) we reiterated our Market Weight call on the Global Metals & Mining sector. While performance hasbeenpositiveoverthe4th quarter

59、of2019,withsomequitenotableperformers (AQG +30%, ILU +15% & FCX +15%), MSCI World Mining (+2.3%) hasunderperformed MSCI World (+3.6%). For the year to date, TSR for MSCI World Mining is +15% while MSCI World is +23%.Looking into 2020 we remain concerned that geo-political tensions (US-China TradeWar

60、,Brexit&USimposedtariffs)willweighonconsumersentimentleaving demand moderating at a time when supply remains elevated. The positive is that investment in new capacity has been limited; instead more productivity improvements have lifted supply. Cost curves are now coming into play, and we are already