In early afternoon trading in New York, copper for delivery in July was at $2.5475 a pound ($5,615 a tonne), not far off levels last seen in 2017.

Oxford Economics Commodity Price Forecasts August 2019
Trade worries have dogged copper price bulls for the better part of a year, but more recently weak data from China, the US and Germany, the world’s top three consumers of industrial metals, has intensified the sell off.

The US manufacturing purchasing managers index (PMI) fell to below 50 today, the lowest reading since 2009 and the first sign that slowing growth in the sector may be turning into outright contraction of activity.

China, which imports more than half the world’s copper, posted the weakest industrial output growth in 16 years in July (although at 4.8% expansion year-on-year, still the envy of developed economies), while the month before German industrial production registered its biggest annual decline in nine years.

A new report by Oxford Economics argues that the copper market’s “decent fundamentals are getting overlooked amid the gloomy backdrop for financial markets”:

The latest Copper Study Group data flagged up a 1% fall in global copper mine production in the first four months of 2019. Also, copper is constrained by a weak global pipeline of mine projects, and production in Chile was down 1% y/y in both May and June, partly due to strike action.

Spot treatment charges (which fall during periods of tightness) are currently down 37% y/y.

We expect the copper market to be in deficit this year and as a result prices look oversold relative to fundamentals.

In another sign of underlying weakness in demand, global copper inventories have been rising steadily after hitting four-year lows in January. Stocks in London Metal Exchange supervised warehouses around the world jumped by 11% over just the past month.

Oxford Economics Commodity Price Forecasts August 2019
Copper stocks have been rising even as stockpiles of other industrial metals, notably zinc and aluminum shrink, and Oxford Economics says “most metal traders attribute the anomalous behaviour of copper as being driven by inventory relocation rather than genuine market weakness.”

The Oxford Economics house view is for the copper price to average around $5,870 a tonne in the fourth quarter this year and climb back above $6,000 early in 2020.

Corresponding ministers, Environment and Tourism Minister N.Tserenbat, Finance Minister Ch.Khurelbaatar and National Development Agency Director B.Bayarsaikhan were assigned to allocate the required financing in the annual economic and social development directions, state budget and state investment programs as well as in the international organizations’ loan and assistances or fund with the help of public-private partnerships.

Taking the tourism capacity and flow into account, Mongolia is able to receive 72 thousand tourists a day and 1.6 million tourists during summer season. Unfortunately, the number of tourists to travel in Mongolia in a year has been around 400 thousand in the last decade. According to the World Economic Forum, Mongolia is ranked at 102th place out of 136 countries in terms of its tourism competitiveness.

The state policy on tourism targets to solving pressing issues concerning the tourism industry, improving competitiveness of Mongolian tourism products, creating jobs through bettering tourism services and products, enhancing the livelihood of local citizens and developing highly beneficial tourism for the economy and society of the country.

Areas to be newly added to the State Special Protected Area cover 13 soums of six aimags. As the areas are taken under special protection, the total size of protected area will be expanded with 1,298,047 hectares (or 0.83 percent). As a result, the total special protected area will make up 32,759,268 hectares or 20.94 percent of total territory of Mongolia.

For instance, Onon Balj National Park will be expanded with some parts of Dadal and Binder soums of Khentii aimag. Develiin Aral nature reserve will be expanded with Lake Achit which is on the border of Uvs and Bayan-Ulgii aimags and classified as national park. Moreover, Khom Steppe in Durvuljin soum of Zavkhan aimag and Gutain Davaa-Khumuul riverhead in Batshireet and Binder soum of Khentii aimag are being taken under special protection in classification of ‘national complex area'.

Interestingly, 1 of the 23 mining licenses were held by ‘Mongol Gazar” LLC which is owned by businessman Ts.Myanganbayar. The licenses cover an area of over 8400 hectares in the Tsenkher Soum of Arkhangai Province.

If the companies do not fulfill their obligations the government will revoke their permits.

Khuvsgul Lake holds 70 percent of Mongolian pure water reserves and is one of the 17 oldest lakes in the world. It is 1,645 metres (5,397 feet) above sea level, 136 kilometres (85 miles) long and 262 metres (860 feet) deep.

Ger and chalet camps have increased around the lake due to the sharp rise of local and foreign tourists. In 2013, Khuvsgul Lake received 23000 tourists – within five years this had tripled to 120000. Currently, 129 legal entities control tourism activity in the area; 160 of the facilities they run are unauthorized, officials said.

Mongolia is preparing for the 2020 Census. According to the National Statistics Office (NSO), the census will be conducted online and using conventional questionnaires. Officials used mobile phone numbers for the counting and registration process during an experimental dummy-run census which was conducted in January 2018. The trial census involved 10 percent of population in the 5th Khoroo of Bayanzurkh District, the 15th Khoroo of the Khan-Uul District, the 6th Khoroo of the Songinkhairkhan District – all located in the capital Ulaanbaatar and the Dornod Province.

The regular nationwide census will start at midnight of Jan 8 2020 and will run for seven days. The final results of the census will be announced in June of the same year.

The Statistical Law of Mongolia states that a national census will be conducted every 10 years. Mongolia conducted its first population census in 1918 followed by 1935, 1944, 1956, 1963, 1969, 1979, 1989 and 2000. The first census of the 21st century was conducted in 2010.

Trade revenue totaled MNT 10.8 trillion in the first half of 2019
In particular, trade revenue totaled MNT 10.8 trillion in the first half of this year, up 23.1 percent over the same period of last year. The retail sector, particularly, online retailing is expanding its scale in the market.

Following the downturn in mining commodity prices, the hospitality industry, especially the foodservice revenue drops. However, it increases as coal prices improve. For example, in the first half of this year, the catering industry’s income reached MNT 217.3 billion, up by 15.6 percent compared to the same period of the previous year. Also, the restaurant revenue grew by MNT 22.6 billion in the reporting period, triggering the GDP to increase.

The industry revenue for hotels rose 40.7 percent, to MNT 66.4 billion in the second quarter of 2019. The number of visitors reached 372,000, up by 70,000 over the previous year. There has been a growth in the hospitality industry in 2018, and this has also shown an increase, supporting the economy.

DR is a tool that allows foreign investors to buy shares in another country’s stock exchanges. In other words, it is a type of transferable financial security that is traded on a local stock exchange but represents a security, usually in the form of equity, that is issued by a foreign publicly listed company.

LendMN is the first Mongolian FinTech company that provides an opportunity for its users to obtain quick loans without collaterals using a mobile application powered by Artificial Intelligence-based credit scoring. The company currently disburses more than 2,500 loans per day.

Compared to the Q4 of 2018, the number of customers increased by 28 percent, the number of loans disbursed improved by 40 percent, the number of loans disbursed drew by 37 percent, and the amount of loan portfolio increased by 60 percent in the first quarter of 2019.

The company distributed 800 million shares in the domestic market. Shareholders own 600 million or 75 percent of the total shares, 200 million or 25 percent are owned by 4,000 small shareholders.

AND Global is an origin company of And Systems LLC and LendMN NBFI JSC, which is responsible for the Group’s investment, strategy, and management. And Global company has attracted USD 5 million from domestic and Asian investors, and the company’s market value has reached USD 30.4 million. Also, the LendMN model is about to be developed in the Philippines in Southeast Asia, Indonesia, and Japan.