BMO Metals Brief

Research evidence excerpt

BMO Metals Brief

2024, $/oz 4,600

China has accumulated a total of 2.16 Moz of gold. In USD terms, the share of gold in China’s

total official reserve assets was broadly steady at 8.8% last month. This follows a relatively firm 4,400

official data print for central bank buying for the month of April, as published last Wednesday but 4,200

the International Financial Statistics and the World Gold Council, which reported 17t net

purchases, following 31t net sales in March. We note that Chinese banks are also relaxing 4,000

restrictions on certain gold investment products to shore up gold demand as prices retreat. See

3,800 our recent Precious Metals Monitor: Inflation Steals the Shine for more tracking data.

08 Mar 08 Apr 08 May 08 Jun

 Nickel dances to Indonesia’s tune: Capacity utilisation of Indonesia’s rotary kiln electric furnaces Source: Bloomberg, BMO Capital Markets

(RKEFs) has dropped to 76% this year from 84% last year in the wake of the country’s nickel ore

mining quota cut, according to Indonesian nickel industry group FINI. Several production lines in

South and Central Sulawesi have reportedly reduced production rates to below 50%, with Spot Iron Ore

smelters opting to operate at low-capacity utilisation as it would be more costly to shut down. 115

According to Septian Hario Seto, a member of the National Economic Council, a price range of

$18,000-20,000/t would be the “sweetspot” for Indonesia nickel. Meanwhile, Indonesia’s Trade

Ministry published technical regulations today to bring coal and ferroalloy exports under the 110

control of a central government-owned firm, with exporters of those commodities now obliged

to report their export activities to a state firm appointed by the government.