MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Wednesday, June 19, 2013
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6:33 PM For the first time in its 27-year history, the prestigious World Food Prize for enhancing the global food supply has gone to a creator of genetically modified crops, a top scientist at Monsanto (MON). The prize has some PR value for MON, potentially aiding the case for bio-engineered food and deflecting some criticism of one of the world's most controversial companies. Comment!
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6:10 PM Cliffs Natural Resources (CLF) says it could scrap its Bloom Lake expansion project in Canada's iron-rich Labrador Trough region if iron ore prices fall back to $90/metric ton. The mine is seen by analysts as a key future growth driver, but "at $90, the project doesn't go, which is consensus right now," CEO Joseph Carrabba tells Reuters; at $110 or $120, roughly the current price, it's a go. Comment!
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5:54 PM Zion Oil & Gas (ZN) says its Board of Directors has approved in-well testing at its Elijah #3 well in the Asher-Menashe License in Israel, in which an application was submitted the country's Petroleum Commissioner for a third one-year extension on April 26. The testing is a key method of obtaining information on the formation fluid and establishing whether a well has found a commercial hydrocarbon reservoir. Comment!
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5:24 PM TransCanada (TRP) announces the appointment of a new independent director, Mr. John Richels, effective immediately. Mr. Richels has been the president and CEO of Devon Energy (DVN) since 2010. Comment!
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4:18 PM Not escaping the post-FOMC, post-Bernanke selloff is gold (GLD -1.2%) which falls to $1,349 per ounce - key support as the technicians like to say as this is the level at which the metal's fast spring slide bounced from in both April and May. Underneath that, there's nothing but air going all the way back to 2009 and $800 per ounce. Ditto for silver (SLV -1.3%) and maybe even worse as that metal has cracked the April and May support. 8 Comments
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3:30 PM The CF Industries (CF +1%) ammonia plant where a fatal blast occurred last week will be idle for weeks longer than scheduled, but the extra downtime will have little impact on nitrogen output or the ability to supply customers, according to the manager of the Louisiana complex: "This is a small part of our operation... We'll have to redistribute product from different places, but overall it won't have an impact." Comment!
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10:16 AM Gevo (GEVO +6.2%) continues to rise on momentum from yesterday's news that it has resumed production of isobutanol at its Minnesota plant. But Raymond James downgrades shares to Market Perform, seeing production challenges ahead and positive margins unlikely to emerge before Q1 2014, with the next plant perhaps not coming online until beyond 2014. 1 Comment
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10:06 AM Century Aluminum (CENX -2.5%) is downgraded to Underperform from Neutral with a $9 price target at BAML, which says its newly lowered estimated 2013 LME price of $0.87/lb. vs. $0.93 offsets an eventual benefit from CENX's recently negotiated lower power costs. The firm also notes sentiment toward added aluminum capacity globally has soured. Comment!
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8:13 AM Cliffs Natural Resources (CLF) -1.8% premarket after shares are downgraded to Underperform from Neutral with a $16 price target (from $24) at BAML, which notes CLF's high cost of iron ore and met coal production. The firm thinks CLF will struggle to compete with new Australia capacity but sees no reason for a liquidity panic. 1 Comment
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Tuesday, June 18, 2013
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5:56 PM Vale (VALE) shares advanced today after Brazil's government unveiled a long-awaited bill to reform the country's mining code, proposing new royalties of up to 4%, double the current rate, and a new mine regulatory agency. The new rules were expected, but investors had been holding back on buying shares for fear they might turn out worse. Comment!
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5:00 PM PetroLogistics (PDH) says it's successfully completed repairs to its propane dehydrogenation facility and the facility has resumed propylene production. The facility was closed earlier this month for repairs on two of the eight reactors at the plant. Total costs for all completed repairs are expected to be less than $2.5M. Shares +0.7% AH. Comment!
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4:18 PM If you want a bullish take on gold (GLD), Ron Paul has one for you. Asked why the yellow metal hasn't performed very well of late, he says "markets do these kind of things … they go up and then they take a rest," but "if you look at the record since the Fed has been in existence, we have about a two cent dollar" and based on "about six thousand years of history" the prognosis for commodity money is pretty good. "As long as we have excessive computerized money … we're going to see gold go up." How far, you ask? "If we're not careful, to infinity," Paul warns. 25 Comments
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3:29 PM Prospect Global Resources (PGRX +51.2%) terminates the rights offering which was scheduled to expire yesterday, obtains an extension of its obligation to raise $7M until June 24, and says its ongoing engineering optimization work and analyses will result in release of a pre-feasibility study in July. Comment!
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12:52 PM Argentina's Santa Cruz province slaps a 1% annual tax on mine resources, a move mining companies say they will challenge in court. While the percentage seems small, miners say it will cost them $100M in new taxes next year, as the tax amounts to ~8% of the total resources of a mine with a 15-year life. Among miners with operations in Santa Cruz: AU -3.5%, MUX -2.3%, GG -2.5%, PAAS -1.4%. Comment!
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12:35 PM Indonesia likely will allow Freeport McMoran (FCX -0.6%) to resume open-pit mining at the Grasberg mine later this week, the country's resources minister says, five weeks after a fatal accident nearby shut multiple mining operations and forced FCX to cancel shipments of concentrate. Grasberg accounts for more than half of FCX's production. 2 Comments
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12:17 PM Thousands of opponents of the $5B Minas Conga copper and gold project in Peru march on Lake Perol, vowing to stop Newmont Mining (NEM -3%) from eventually draining it to reservoirs NEM and partner Buenaventura (BVN -2.6%) are building. Protesters, who fear the mine would threaten their water, say they plan to build a permanent camp near the lake to impede work on the site. Comment!
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10:13 AM Mechel (MTL +11.2%) leaps higher on news the company's board authorized the buyback of up to $100M of ADRs representing Mechel's common shares. Comment!
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9:19 AM Steel Dynamics (STLD) issues downside guidance for Q2, seeing EPS of $0.10-$0.14 vs. $0.24 consensus estimate, citing anticipated slower economic growth in China. Overall steel shipments are expected to rise slightly Q/Q, as decreases in merchant bar volume should be more than offset by increased sheet and other long product shipments. Comment!
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8:49 AM BHP Billiton's (BHP) plans to sell a coal mine in New Mexico to the Navajo Nation for ~$85M have been derailed by proposed reforms of the state's electricity market. The Navajos had expected to close a deal with BHP by July 1, but it can't go ahead until a separate deal is completed between two utilities for part of a power station that buys coal from the mine on Navajo land. Comment!
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