BMO Metals Brief

Research evidence excerpt

BMO Metals Brief

been 5,500

a positive catalyst. Meanwhile, aluminium futures prices have predictably fallen in trading this 5,400

morning given news overnight, with LME managed money positioning very long ahead of this. 5,300

5,200

 New China Mineral Resources Law takes effect: On Monday, China’s amended Mineral Resources 5,100

5,000

Law (MRL) is expected to take effect. This comes following an earlier decree of the State Council 4,900

signed by Chinese Premier Li Qiang on May 20, for new regulations to facilitate the “proper 4,800

development and utilisation of mineral resources”. These regulations, published by the Ministry 4,700

4,600

of Ecology and Environment of the People’s Republic of China on May 15, consist of 8 chapters 4,500

and 79 articles, stipulate improvements to the mining rights system, detail rules related to 12 Mar 12 Apr 12 May 12 Jun

mineral resource exploration and exploitation, and refine provisions concerning ecological

restoration in mining areas. The regulations also propose adjusting the strategic mineral Source: LME, BMO Capital Markets

resources catalogue, considering the importance to national security, domestic endowment, and

supply chain resilience. In our view, these regulations bring the risk of supply constraints Spot Gold

emerging in some mined and refined metals, although we await commodity specific details.

5,400

 China credit data shows marginal recovery from a low base: China’s new yuan loans gained

RMB520B m/m in May, recovering from a rare sequential decline of RMB10B m/m in April, 5,200

albeit remaining down y/y. Furthermore, new medium-long-term household loans fell by 5,000

RMB57B m/m, while loans to businesses shrank by RMB20B m/m last month, both improving on