• Thursday, February 11, 2016

  • 3:48 PM
    • A day after announcing a share sale to fund its precious metals streaming deal with Glencore, Franco-Nevada (FNV +6.1%) boosts the size of the financing by 45% because of strong demand.
    • FNV says the bought-deal transaction will raise at least $800M through the sale of 16.7M shares for $47.85 each; yesterday it had expected to raise $550M in a bought deal.
    • FNV now says some of the proceeds may be used to pay down its credit facility, as well as for further investments and to fund the $500M purchase of the precious metals stream on production from Glencore’s Antapaccay mine in Peru.
    • FNV has $290M in net debt and a partly drawn $1B credit facility, CEO David Harquail says.
    | 3:48 PM
  • 3:27 PM
    | 3:27 PM | 34 Comments
  • 2:49 PM
    • OPEC members are ready to come to agreement on a production cut, reports Dow Jones, citing UAE's energy minister.
    • Earlier sitting at a 13-year low of about $26, oil (USO -1.1%) has spiked more than $1 per barrel. It's naturally taking stocks along with it - the Dow (DIA -1.6%) has cut what was a 400 point loss about in half.
    | 2:49 PM | 126 Comments
  • 12:46 PM
    • Huntsman (HUN +1.2%) reverses early losses of as much as 8% after saying during its earnings conference call that it plans to spin off its TiO2 unit when market conditions permit; analysts say the unit could fetch $2B-$2.5B.
    • "We should be very close to being able to spin that by the end of the year,” CEO Peter Huntsman said, adding that a titanium dioxide merger or joint venture is possible with the right partner.
    • HUN reported better than expected Q4 earnings but below consensus revenues, and says it expects continued EBITDA pressure on its cyclical businesses as a result of lower priced oil and weaker global economic growth.
    • But HUN projects free cash generation to improve by $350M in 2016 because of cost reductions and fewer restructuring expenses.
    • HUN plans to spend ~$450M annually on capex in 2016 and 2017 after spending $663M on capex in 2015.
    | 12:46 PM | 1 Comment
  • 11:57 AM
    • Anglo American’s (OTCPK:AAUKF, OTCPK:AAUKY) Brazilian niobium and phosphate mines are attracting interest from X2 Resources, the P-E firm founded by former Xstrata CEO Mick Davis, among other companies, Bloomberg reports.
    • Anglo reportedly has hired Goldman Sachs and Morgan Stanley to sell the assets as a package valued at $1B, and is expecting to receive bids next week.
    • Anglo is trying to raise another $4B from asset sales to cope with a collapse in commodity prices, after generating ~$2B by offloading its tarmac business, two copper mines in Chile and platinum assets in South Africa.
    | 11:57 AM
  • 10:49 AM
    • Bunge (BG -11.2%) plunges in early trading after reporting lower than expected Q4 earnings as U.S. soybean processing margins fell and Brazilian demand weakened for food products such as margarine and wheat.
    • BG says oilseed processing income fell as U.S. crush margins softened in anticipation of increased Argentine supply, echoing comments earlier this month from competitor Archer Daniels Midland.
    • BG says Q4 profit from its food and ingredients segment fell 45% Y/Y, and CEO Soren Schroder said the unit will continue to experience difficult conditions in Brazil.
    | 10:49 AM
  • 9:59 AM
    • Glencore (OTCPK:GLCNF, OTCPK:GLNCY) says its copper production fell 3% in 2015 to 1.5M metric tons, and slipped 6% in Q4 to 374K tons, and plans to cut copper output ~7.5% this year and reduce zinc supply by a quarter.
    • Q4 zinc production fell 18% Y/Y to 317.7K tons, while coal output slid 17% to 28.8M tons.
    • Yesterday, Glencore agreed to a $500M deal with Franco-Nevada (FNV -2.3%) to sell precious metals output from the Antapaccay mine in Peru, its second precious metals streaming transaction after agreeing to sell a share of silver output to Silver Wheaton last year and bringing upfront proceeds from streaming to $1.4B.
    • The streaming deal is "yet another sign that Glencore is delivering on its promises and executing its deleveraging action plan,” says Bernstein analyst Paul Gait.
    | 9:59 AM | 2 Comments
  • 7:58 AM
    • Rio Tinto (NYSE:RIO-3.6% premarket after scrapping its dividend policy and slumping to a net loss for 2015 as well as its worst underlying earnings in 11 years.
    • Rio says this year’s annual dividend could be roughly half the US$2.15/share payout declared for 2015, and that it can no longer justify its commitment to maintaining or steadily increasing its dividend each year as the global economic outlook worsens and prices for many commodities that it produces such as iron ore and coal are at multiyear lows.
    • Rio’s move signals plenty of pain to come for global miners as they report earnings in the coming weeks; rival BHP is due to announce results on Feb. 23, and now is expected to follow Rio by abandoning its own progressive dividend policy.
    • CEO Sam Walsh says Rio aims to cut another $2B off operating costs over the next two years, after chopping $1.3B in 2015, and plans to cut capex by $3B more than previously flagged over the next two years, but Walsh says the cuts would not be at the expense of investments in a new iron ore mine in the Pilbara, an expansion of the Oyu Tolgoi copper mine and a new bauxite mine in Australia.
    • Rio reports a FY 2015 net loss of $866M vs. a $6.53B profit in 2014, weighed by $1.8B in writedowns relating mainly to its Simandou iron ore project in Guinea and exchange losses on debt; 2015 underlying earnings fell 51% to $4.54B from $9.31B in 2014, hit by weaker iron ore, copper and aluminum prices.
    • Earlier: European earnings roundup
    | 7:58 AM | 6 Comments
  • 7:33 AM
    • The yellow metal's up 3.5% to $1,237 per ounce as Europe plunges nearly 4% and U.S. stock index futures tumble more than 2%. It was nearly one year ago to the day when gold last was this high.
    • While Janet Yellen in her first day of Congressional testimony acknowledged the risks to growth have ticked higher, the Fed boss was perhaps somewhat surprisingly upbeat on the economic outlook and hawkish on the likelihood of more rate hikes. Will she change her tune on day two?
    • GLD +3% premarket
    • ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GTU, GLL, UGLD, DZZ, GLDI, OUNZ, DGL, DGZ, DGLD, GEUR, GYEN, UBG, QGLDX
    | 7:33 AM | 15 Comments
  • 7:32 AM
     
  • Wednesday, February 10, 2016

  • 7:17 PM
    • Kinross Gold (NYSE:KGC+3.7% AH after posting mixed Q4 results but saying it expects to shake off a money-losing 2015 with record production and lower costs this year.
    • KGC says it expects record 2016 production of 2.7M-2.9M oz. of gold equiv. at an all-in sustaining cost of $890-$990/oz., with capital spending forecast at $595M.
    • For 2015, KGC produced 2.59M oz., at the high end of its guidance, at an all-in cost of $975/oz.; for Q4, output totaled 623K oz., down ~7% Y/Y due mainly to the temporary curtailment of milling operations at its Paracatu mine in response to a lack of rainfall in southeastern Brazil.
    • Proven and probable mineral reserves were 34M oz. of gold at year-end 2015, as additions largely offset depletion during the year.
    | 7:17 PM | 13 Comments
  • 5:45 PM
    • Franco-Nevada (NYSE:FNV) -5% AH after agreeing to acquire a precious metals stream on production from Glencore’s Antapaccay mine in southern Peru for $500M.
    • FNV estimates Antapaccay's mine life to extend until 2030 and would mine 538M metric tons of sulphide ore at an average copper grade of 0.52%.
    • To fund the deal, FNV announces a $550M bought-deal financing in which underwriters agreed to purchase 11.5M common shares at $47.85/share, with an option to purchase an additional 1.725M shares at the offering price.
    | 5:45 PM
  • 12:58 PM
    • The proposed merger of Dow Chemical (DOW -0.1%) and DuPont (DD -0.3%), which prompted an upgrade at Bernstein a month ago, is now the subject of a more critical review at the firm, which calls the current merger structure "sub-optimal."
    • The current structure will create three problems, the firm says: the $4B in synergies the companies have guided are unrealistic; Dow would remain an integrated commodity/specialty player - which the firm sees historically as one of the company's main impediments - DuPont's culture issues would not be resolved; and the DuPont-dominated "specialty products" business would be a shadow of DuPont, "basically waiting to be carved up and sold."
    • Bernstein believes the Dow-DuPont split-up plan should be revised to form three focused agriculture, commodity and specialty chemicals businesses which would enable the resolution of the integrated structure at Dow, the muddled structure and diffuse accountability at DuPont, while also significantly increasing both cost and growth synergies.
    • Dow is rated Outperform with a $64 price target; DD also is rated Outperform, with an $81 target.
    | 12:58 PM | 8 Comments
  • 11:40 AM
    • Black gold shot higher on an unexpected draw on U.S. inventories last week, but has turned and slipped back under $28 per barrel.
    • WTI crude is currently down 0.2% to $27.78
    • Also among the news to digest is a surprisingly upbeat Janet Yellen testifying before Congress - while acknowledging downside risks to the outlook, she continues to expect rate hikes this year.
    • Then there's BP CEO Bob Dudley who says the market won't start to balance until every tanker and swimming pool is filled to the brim with oil (sometime in H2, he says).
    • ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DWTI, DBO, DTO, UGA, USL, DNO, UHN, OLO, SZO, OLEM
    | 11:40 AM | 38 Comments
  • 10:56 AM
    • Australian nickel miners including BHP Billiton (NYSE:BHP) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY) are under increasing pressure to suspend or cut production, as investors await key announcements in coming weeks after rival producers in New Caledonia won a pledge of support from France.
    • Nickel prices have fallen more than 45% since early 2015 to their lowest since 2003, and are seen continuing lower amid ample global stocks and slowing growth in China.
    • Glencore and BHP, whose high-cost Murrin Murrin and Nickel West facilities are struggling to sustain operations, are both due to make production and profit reports in coming weeks, and news of any output cuts could boost prices.
    • J.P. Morgan estimates $1B in rehabilitation costs in the event of a closure of BHP's Nickel West, but says it may be BHP's best option given it otherwise would be hit with nearly $1B in free cash flow losses over the next three years.
    | 10:56 AM
  • 7:53 AM
    • Freeport McMoRan (NYSE:FCX) is granted a new six-month export permit by Indonesia's government, ending a nearly two-week stoppage due to a dispute over payment for a new metal smelter.
    • FCX halted shipments from its Grasberg mine last month after the government demanded the company first pay a $530M deposit for a smelter before it renewed the permit.
    • Copper futures fell sharply yesterday after Indonesia's mining industry recommended the resumption of shipments, and are continuing lower, partly on oversupply concerns exacerbated by the decision on Grasberg exports.
    • FCX +2.6% premarket.
    | 7:53 AM
  • 4:04 AM
    • Oil prices are pushing higher after Iran proclaimed it was open to cooperation with Saudi Arabia, partly recovering from a 6% fall in the previous session on oversupply worries and weak equities.
    • "We support any form of dialogue and cooperation with OPEC member states including Saudi Arabia," Iranian oil minister Bijan Zangeneh told Press TV.
    • Traders will also turn to EIA's weekly inventory data this morning, following yesterday's API figures that reported a build of 2.4M barrels in U.S. crude stockpiles.
    • Crude futures +2.3% to $28.58/bbl.
    • ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DWTI, DBO, DTO, USL, DNO, OLO, SZO, OLEM
    | 4:04 AM | 42 Comments
  • Tuesday, February 9, 2016

  • 7:07 PM
    | 7:07 PM | 70 Comments
  • 6:55 PM
    • AngloGold Ashanti (NYSE:AU) asks Ghana to redeploy troops to its Obuasi mine after an employee died in an attack by hundreds of illegal miners on the facility last week.
    • AU says the military withdrew from Obuasi on Feb. 2 following several attacks at the site during Jan. 30-31, and hundreds of illegal miners stormed the mine days later, killing a staff member.
    • AU fired workers and put the mine on limited operations last year as costs soared and the price of bullion fell; it says it plans to keep searching for a partner and find a solution for the mine before the end of the year.
    | 6:55 PM
  • 3:30 PM
    | 3:30 PM | 55 Comments
  • 2:58 PM
    • Bunge (BG -2.2%) says it is suing the Egyptian government over a cargo of grain that was recently rejected, escalating a standoff between the world’s largest wheat importer and its suppliers.
    • The shipment of French wheat was rejected for containing traces of the potentially dangerous ergot fungus, but the company says the shipment met the quality standards of Egypt’s state grain buyer.
    • The dispute is making it harder for Egypt to secure the wheat it needs to provide subsidized bread for its population; last week, the government held two tenders in an effort to add to its wheat supplies but made no purchases as wary suppliers held back from making offers.
    | 2:58 PM | 1 Comment
  • 1:20 PM
    • The EIA lowered its forecast on oil prices in a new forecast.
    • The government agency expects WTI prices to average $37.59/bbl this year vs. $38.54/bbl prior forecast. The EIA sees Brent crude averaging $37.52/bbl in 2016 vs. $40.15 prior view.
    • U.S. retail gas prices are seen averaging $1.98/gallon this year and $2.21/gallon in 2017.
    • Oil futures are lower on the day.
    • ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, UGA, USL, DNO, UHN, OLO, SZO, OLEM.
    | 1:20 PM | 10 Comments
  • 12:39 PM
    • ArcelorMittal (MT -9.9%) chalks up another 52-week low, capping a 23% plunge in three days since delivering unwelcome news that it would raise $3B through a rights issue to reduce its debt burden after posting a ~$7.9B net loss last year.
    • J.P. Morgan downgrades MT to Neutral from Overweight, citing a continued weak fundamental picture for global steel markets, with 2015′s price falls yet to trigger any significant capacity reductions, while also estimating a further 4% reduction in Chinese consumption in FY 2016.
    • While the firm sees a better environment for U.S. steel stocks, their shares also are lower today: X -6.8%, AKS -6.3%, NUE -2.1%, STLD -3.2%.
    | 12:39 PM | 5 Comments
  • 10:57 AM
    • Freeport McMoRan (FCX -2.1%) can help itself in H1 2016 through asset sales, Jefferies analysts say in raising its stock target price to $6.50 from $5.
    • The firm expects M&A activity in the mining sector to increase this year, as leveraged miners consider selling high quality assets and miners with financial flexibility are ready to buy; in the case of FCX, a copper asset sale would improve the company's liquidity and unlock value, thus pushing the share price higher.
    • Jefferies maintains its Hold rating on FCX, but says near-term downside risk has diminished.
    | 10:57 AM | 6 Comments
  • 10:45 AM
    • Kinross Gold (KGC +4.9%) is upgraded to Outperform from Neutral with a $2.75 price target, raised from $2.25, at Credit Suisse, which cites currency tailwinds that could help KGC beat consensus on 2016 guidance and result in higher NAV estimates for Paracatu and Kupol.
    • Credit Suisse also likes KGC's relatively low reserve risk, improved production profile, declining balance sheet risk with higher gold prices, attractive valuation, and high leverage to the gold price.
    • KGC gained ~9% yesterday as BMO Capital also upgraded the stock.
    | 10:45 AM
  • 9:58 AM
    • Crude oil could drop below $20/bbl, but the oil slump does not seem likely to derail the global economy, Goldman Sachs predicts, in a bearish view that coincides with the latest report from the IEA.
    • With capacity to store oil exhausted in some places, prices may need to drop low enough to halt crude output that can no longer be stockpiled, says Jeff Currie, Goldman’s head of commodities research.
    • The storage sites most likely to run out of space are "landlocked,” such as Cushing, Okla., where inventories reached 64.2M barrels in the week to Jan. 15, the highest in data from the Energy Department that extend back to 2004.
    • The IEA says the global oil surplus will be bigger than previously estimated, increasing the risk of further price losses, as Iran and Iraq boost production while demand growth slows.
    • ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DWTI, DBO, DTO, USL, DNO, OLO, SZO, OLEM
    | 9:58 AM | 48 Comments
  • 8:59 AM
    • Indonesia’s Energy and Mineral Resources Ministry issues a recommendation for Freeport-McMoRan (NYSE:FCX) to renew its export permit that will pave the way for the company to resume shipments from the Grasberg copper and gold mine.
    • Local unit Freeport Indonesia expects to get the export permit soon, a spokesperson tells Bloomberg.
    • The recommendation aids FCX as it struggles with a collapse in metals prices and after the company’s shares have plunged 72% in the past year.
    | 8:59 AM | 2 Comments
  • 7:24 AM
     
  • 4:46 AM
    • The surplus of supply over demand at the start of the year is "even greater" than initially expected, the International Energy Agency said in its latest monthly report.
    • "With the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term."
    • Supply may exceed consumption by an average of 1.75M bpd in the first half of 2016, compared with an estimate of 1.5M last month, and the excess could swell if OPEC members bolster production.
    • Crude futures +2.2% to $30.34/bbl.
    • ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DWTI, DBO, DTO, USL, DNO, OLO, SZO, OLEM
    | 4:46 AM | 53 Comments
  • 4:27 AM
    • The economic woes sparking turmoil for global equities are a boon for gold, as traders jump further into safe haven assets.
    • Spot bullion on Monday climbed as much as 2.3% to $1,200.97, its biggest intraday gain in two months and highest level since June 22.
    • However, not everyone is a believer. Goldman Sachs predicts losses over the coming year as the Federal Reserve raises U.S. interest rates no fewer than three times.
    • ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GTU, GLL, UGLD, DZZ, GLDI, OUNZ, DGL, DGZ, DGLD, GEUR, GYEN, UBG, QGLDX
    | 4:27 AM | 22 Comments
  • Monday, February 8, 2016

  • 3:42 PM
    • Randgold Resources (GOLD +9.1%) reaches a 52-week high after proposing to raise its annual dividend by 10% and as gold prices shoot higher today amid big losses in the broader equity markets.
    • In an interview with Financial Times, CEO Mark Bristow cools expectations that the company is poised to make a big acquisition, with the brighter outlook for gold making it less likely that the company can snap up cheap assets.
    • Deutsche Bank downgrades the stock to Hold from Buy, saying low cost production and an ungeared balance sheet should provide a relative premium but that shares have overshot the firm's fair value and do not offer enough growth or yield to maintain the rally, especially as gold's run-up is likely to "peter out."
    | 3:42 PM | 1 Comment
  • 2:34 PM
    • Kinross Gold (KGC +9.1%) is upgraded to Outperform from Market Perform with a $2.75 price target, raised from $2, at BMO Capital, with potential upside in Nevada as a positive catalyst for the stock.
    • KGC has gained 25% in recent days, yet shares still trade “at a meaningful discount” to the peer group, according to BMO, which considers KGC an operator with a strong track record of execution, and “a relatively lower-risk company."
    • KGC is undergoing a scoping study for an expansion scenario at Round Mountain, after acquiring the asset along with Bald Mountain from Barrick Gold late last year; BMO thinks the expansion appears more attractive at the current gold price of ~$1,170/oz. vs. $1,085/oz. at the time of the acquisition.
    | 2:34 PM | 2 Comments
  • 10:58 AM
    • "Things may still get worse before they get better" in the mining industry, Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) CEO Mark Cutifani says, in keeping with the generally gloomy assessment from mining execs at an industry conference in Cape Town, South Africa.
    • Commodity prices may not have bottomed yet, so 2016 could be even more difficult for mining companies and commodity markets than 2015, Cutifani says; to put that thought in perspective, copper and iron ore prices fell a respective 25% and 40% in 2015, and Anglo’s share price plunged 75%.
    • The CEO says the slump in prices has deprived the company of ~$350M/month in revenue; the depth of the problems facing Anglo were highlighted again today as its Amplats (OTCPK:AGPPY) unit reported a 12.12B rand ($760M) net loss for FY 2015 vs. a profit of 624M rand a year earlier.
    | 10:58 AM | 1 Comment
  • 9:49 AM
    • AngloGold Ashanti (AU -0.9%) wants to find a solution for its aging Obuasi mine in Ghana by H2 of this year, CEO Srinivasan Venkatakrishnan tells Bloomberg.
    • AU cut workers and placed Obuasi on limited operations last year as costs spiraled to more than $1,500/oz., but the CEO says returns can be improved once the government agrees to a tax regime and mining laws.
    • AU needs a partner to help access the mine's 5.29M oz. of gold situated in high-grade ore yielding 6.7 grams/ton; Randgold Resources (GOLD +6.8%) in December rejected a proposal to redevelop the mine with AU, saying the project does not meet its investment criteria.
    | 9:49 AM
  • 9:19 AM
    • Randgold Resources (NASDAQ:GOLD) +2.3% premarket after proposing to increase its annual dividend by 10% on the back of strong cash flow, as Q4 earnings came in roughly as expected.
    • GOLD says its cash on hand more than doubled to $213.4M last year, while production and costs were in line with its forecast; CEO Mark Bristow says the company is able to break even with a gold price that is less than $800/oz.
    • “We will continue to increase our dividend and continue to grow our cash until we get to $500 million cash on the balance sheet,” the CEO says.
    • The miner says it produced a record 1.21M oz. in 2015 at an average cost of $679/oz., and plans to produce 1.25M-1.3M oz. of gold at a cash cost of $590-$630/oz. this year.
    • GOLD plans to spend $240M on capital spending in 2016 and $115M in 2017, compared with $182M spent in 2015.
    • “Randgold is one of the few companies to still generate earnings growth, while its investment discipline has left it well placed to withstand the current environment,” Investec says.
    | 9:19 AM
  • 8:57 AM
    • Lake Shore Gold (NYSEMKT:LSG+9.3% premarket after agreeing to be acquired by Tahoe Resources (NYSE:TAHO) in an all-stock deal valued at ~C$945M.
    • TAHO will pay 0.1467 of its stock for each LSG share, which works out to C$1.71, a 14.8% premium to LSG shares, based on both stocks' Friday close; the companies say the deal has an implied equity value of C$945M, assuming the conversion of some debentures.
    • The deal adds LSG's low-cost gold Timmins West and Bell Creek mines in Timmins, Ontario, to TAHO's portfolio, which already includes the Escobal mine in Guatemala and two mines in Peru.
    • The combined company is expected to produce 370K-430K oz. of gold in 2016 at total cash costs of $675-$725/oz. and all-in costs of $950-$1,000/oz.
    • TAHO -2.7% premarket.
    | 8:57 AM | 8 Comments
  • 8:29 AM
    • Noranda Aluminum (OTCPK:NORN) says it is filing for Chapter 11 bankruptcy protection, citing challenging market conditions for the aluminum industry and recent disruptions in its primary business operations.
    • NORN says it has reached an agreement in principle with its existing asset-based loan lenders for up to $130M in debtor-in-possession financing and has received a commitment for up to $35M in incremental DIP financing; it will use its cash from operations and the new financing to support business during the court-supervised process, if the plans are approved.
    • NORN says it has begun a sales effort for three rolling mills that make up its downstream business, but will continue to operate its primary aluminum production facility in Gramercy, La.
    | 8:29 AM | 4 Comments
  • 7:55 AM
    • Cliffs Natural Resources (NYSE:CLF) says it is settling a pending federal securities lawsuit that alleged dissemination of false or misleading information related to its former Bloom Lake iron ore mine in Canada.
    • CLF says its insurance carriers will pay the full amount of the $84M settlement, which will have no impact on its financial position or operations.
    • CLF also agrees to changes to its corporate governance policies, protocols and practices as part of a settlement of pending shareholder derivative actions related to Bloom Lake.
    | 7:55 AM | 10 Comments
  • 4:54 AM
    • Oil futures are drifting into the red after a weekend meeting between Saudi Arabia and Venezuela to discuss coordination on crude costs ended with few signs there would be steps taken to boost prices.
    • "They seem like just general talk about cooperation, but nothing about cutting production," OPEC sources said. "The issue is not with Venezuela, it is with Iran."
    • Crude futures -3.5% $29.81/bbl.
    • ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DWTI, DBO, DTO, USL, DNO, OLO, SZO, OLEM
    | 4:54 AM | 72 Comments
  • Friday, February 5, 2016

  • 3:43 PM
    • Cliffs Natural Resources (CLF -4.1%) is reiterated with a Sell rating at Deutsche Bank, with a reduced $1 stock price target cut from $1.50, citing potential downside risks to its base case iron ore outlook and unsustainable debt levels.
    • "While a successful execution of recently announced debt exchange offer could be a short-term catalyst, it may not alter medium-term solvency concerns," Deutsche Bank analyst Jorge Beristain writes.
    • A fully-successful exchange could reduce CLF's debt by $925M and generate ~$40M/year in savings, but the company's net debt to EBITDA still would be ~11x, Beristain calculates; also, he does not expect a fully subscribed exchange offer, believing the offering will be less than 50% subscribed.
    | 3:43 PM | 20 Comments
  • 12:58 PM
    • Mining stocks hit hard in 2015 are the darlings of the new year, as the drag on the dollar due to fresh jitters about the strength of the U.S. economy has helped power the group higher.
    • The dollar’s weakness has helped fuel the recent bounce in commodities: Iron ore, which sank 40% in 2015, has gained 14% since mid-January, while copper prices, which hit their lowest levels since early 2009 in mid-January, are up 10%.
    • A glimmer of hope about China and global growth could signal a bottom for commodities and mining stocks, Bernstein's Paul Gait says, but other analysts caution that the rally could be a “bull trap" - a brief bounce before another dive into the red.
    • Relevant tickers: FCX, OTCPK:AAUKF, OTCPK:AAUKY, OTCPK:GLCNF, OTCPK:GLNCY, BHP, RIO, VALE
    | 12:58 PM | 24 Comments
  • 12:29 PM
    • Even as crude oil is cheaper than during the financial crisis seven years ago, global oil prices have not fallen far enough yet to force oil producers to shut in more than 0.1% of the world’s daily supply, according to a new oilfield analysis from energy consultant Wood Mackenzie.
    • Just 100K bbl/day out of the 96.1M bbl/day of oil pumped worldwide have been closed so far since the price plunge, most of it in Canada's oil sands, conventional U.S. projects and aging fields in the U.K. North Sea, according to the analysis.
    • The data suggests if oil prices stay at current levels, the oil market will have to wait out a slow, natural decline in worldwide crude production before the large oversupply that has kept prices low for months can be corrected.
    • ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DWTI, DBO, DTO, USL, DNO, OLO, SZO, OLEM
    | 12:29 PM | 42 Comments
  • 8:45 AM
    • ArcelorMittal (NYSE:MT) -6.7% premarket after confirming plans to seek $3B in new capital from shareholders to shore up its finances following FY 2015 losses of nearly $8B.
    • MT blames the loss - which includes a $6.7B setback in Q4, with $4.8B in impairment charges mostly related to its iron ore operations - mainly on falling steel prices that were depressed by a surge of Chinese exports, and to writeoffs in the company’s mining business.
    • In an indication of continuing difficult conditions, MT forecasts FY 2016 EBITDA of at least $4.5B, compared with $5.2B in 2015, amid relatively weak demand for steel this year, with only the U.S. market showing growth.
    • MT is tapping shareholders for funds rather than focus on asset sales because there are signs the steel market has bottomed out, CFO Aditya Mittal says.
    • MT also will sell its 35% stake in Spain’s automotive metals component firm Gestamp Automoción for ~$1B by the end of June as part of its attempt to pay down debt; the company says it wants to reduce net debt to less than $12B from $15.7B at the end of December.
    • Earlier: Bloomberg: ArcelorMittal preparing €3B capital raise (Feb. 4)
    | 8:45 AM | 2 Comments
  • 4:52 AM
     
    • Gold is poised for its largest weekly gain since in a month with a 3% jump for the week. The strength of the metal is attributed to a weaker U.S. dollar and fading expectations for U.S. rate hikes.
    • The spot price of gold is up 0.1% to $1,156 per ounce in today's early action.
    | 4:52 AM
  • Thursday, February 4, 2016

  • 5:23 PM
    • Centerra Gold (OTCPK:CAGDF) wins approval from Mongolia's parliament to mine the Gatsuurt deposit after a five-year delay.
    • The legislation grants the host country a 34% ownership of the Gatsuurt project, which contains 1.6M oz. of probable gold reserves, while Centerra will hold the remaining 66%.
    • Centerra CEO Scott Perry says developing Gatsuurt will require "very modest" initial capital investment, because the project will use a mill and other infrastructure at the company's existing Boroo mine, which is only 34 miles away.
    | 5:23 PM
  • 4:47 PM
    • ArcelorMittal (NYSE:MT), facing nearly $15B in bond repayments over six years, is planning a capital increase of ~€3B ($3.4B), Bloomberg reports.
    • CEO Lakshmi Mittal’s family trust, which already owns ~37% of the shares, likely will subscribe to a significant portion, according to the report.
    • Shares of MT, the world’s largest steelmaker, have dropped 58% in the past year, hit by declining steel prices.
    • MT -10.4% AH.
    | 4:47 PM | 10 Comments
  • 3:29 PM
    • In the president's final budget to be released next week, he's set to propose more than $300B worth of investments in various trendy climate-friendly transportation ideas, reports Politico. The heady number is to be paid for with a $10 per barrel "fee" on every barrel of oil.
    • It's likely DOA in a Republican-controlled Congress, but it's certain to be a conversation-starter, particularly in an election year. Adding up to $0.25 per gallon to the cost of gasoline? What say you Mr. or Ms. Presidential candidate?
    • ETFs: USO, OIL, XLE, UCO, UWTI, VDE, ERX, OIH, SCO, BNO, DWTI, DBO, ERY, DIG, DTO, UGA, DUG, BGR, USL, IYE, DNO, FENY, PXJ, FIF, UHN, DBE, OLO, RYE, SZO, RJN, FXN, DDG, OLEM, JJE, ONG, UBN
    | 3:29 PM | 210 Comments
  • 12:58 PM
    • Primero Mining (PPP -26.6%) plunges after saying its Mexico-focused subsidiary had received a legal claim from Mexican tax authorities seeking to nullify a 2012 advance pricing agreement.
    • PPP says the APA confirmed its basis for paying taxes on realized silver prices during 2010-14 and represented the tax authority's agreement to accept that basis for those years.
    • PPP says the legal claim is without merit and will defend the validity of its APA.
    | 12:58 PM | 8 Comments
  • 12:41 PM
    • The dollar (UUP -0.6%) is retreating again today, continuing a move which began at the start of the week and picked up steam yesterday morning when New York Fed President Bill Dudley called out the greenback's strength as a cause for concern.
    • Not coincidentally, commodity stocks are bouncing off of sharply discounted levels, with names like Freeport McMoRan, Vale, and Cemex up double digit percentages over the last day-plus.
    • Turning to countries, Brazil (EWZ +3.7%) is on a two-day tear of about 6%, and Canada (EWC +2%) of just under 3%. In its first chance to respond to Dudley's remarks, Australia (EWA +2.1%gained 2.1% overnight.
    • ETFs: DBB, BOM, RJZ, BOS, JJM, BDD, UBM, BDG, HEVY
    | 12:41 PM | 6 Comments
  • 10:41 AM
    • Harmony Gold (HMY +11.7%) is higher after it swung to a profit in its FQ2 on improved revenues that beat analyst forecasts, as production rose and a weaker rand currency offset declines in the dollar price of bullion.
    • HMY says its FQ2 gold production rose for the third straight quarter, up 2% to slightly more than 287K oz.
    • Production profit surged 84% Q/Q to 1.29B rand (68% to US$91M), mostly due to a 7% rise in the gold price received and supported by the increase in gold production.
    • HMY is seeking to make acquisitions, preferring operating mines in its existing locations of sub-Saharan Africa and Papua New Guinea, Finance Director Frank Abbott says.
    | 10:41 AM
  • 9:50 AM
    • Glencore's (OTCPK:GLCNF, OTCPK:GLNCY) credit rating is downgraded to BBB-, just one notch above junk, from BBB by Standard & Poor's, which has lowered its price assumptions for some of Glencore’s key products, including copper, zinc and nickel.
    • S&P cites the mining industry's material challenges, with increased uncertainty about future operating performance in 2016-17, as well as its assessment that Glencore's 2015 financial profile fell below earlier expectations with funds from operations to debt closer to 20%.
    • However, SP judges Glencore's outlook as stable, as the miner's meaningful continuing free cash generation, strong liquidity and active balance sheet deleveraging should mitigate downside risk.
    • S&P cut its credit rating for BHP Billiton earlier this week and Vale last week.
    | 9:50 AM
  • Wednesday, February 3, 2016

  • 5:33 PM
    | 5:33 PM | 58 Comments
  • 3:36 PM
    • The U.S. Department of Labor grants Trade Adjustment Assistance to workers at Alcoa's (AA +7.2%) Intalco aluminum smelter in Washington state, after the workers complained that Chinese dumping threatened their jobs.
    • The DoL does not mention China in its response, but the ruling could serve as evidence of injury to workers in any potential trade case.
    • The 279K metric ton/year Intalco facility is expected to suspend production at the end of Q2.
    | 3:36 PM | 5 Comments
  • 2:45 PM
    • Monsanto (MON +1.6%) says it received import approval from China for its new genetically modified Roundup Ready 2 Xtend soybeans, and that it will begin selling the seeds in the U.S. and Canada.
    • MON's next-generation soybean variety is engineered to tolerate applications of glyphosate and dicamba herbicides amid a growing problem of glyphosate-resistant weeds in North America.
    • Dicamba use is allowed in Canada but not yet approved in the U.S., where it is still under review by the EPA.
    | 2:45 PM | 22 Comments
  • 2:36 PM
    • Renewed chatter of talks between Russia and Saudi Arabia on production cuts seems as good of an excuse as any for oil's 7.3% gain today to $32.08 per barrel. USO +8.4%
    • The move comes despite the EIA reporting a big 7.8M barrel build in crude stocks.
    • Oil's moonshot has brought the XLE with it, and, in turn, the major averages. Down 1% earlier, the S&P 500 is higher by 0.1%, with the XLE up a full 2.2%.
    • ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, UGA, USL, DNO, UHN, OLO, SZO, OLEM
    | 2:36 PM | 110 Comments
  • Tuesday, February 2, 2016

  • 10:58 AM
    • Dow Chemical (NYSE:DOW) CEO Andrew Liveris will leave the company after the completion of its merger with DuPont (NYSE:DD), he says during the company's earnings conference call.
    • The move would mark a victory for Dan Loeb, who had called for his removal.
    • Earlier: Dow Chemical beats estimates as cost cuts pay off
    • DOW +2.8%, DD +2.4%.
    | 10:58 AM | 12 Comments
  • 9:58 AM
    • A big bounce in the price of crude oil at the end of January - which took the price of Texas Tea to nearly $35 per barrel from about $27 - is officially over. With today's 5% decline to back under $30, crude is lower by almost 12% in the first one day-plus in February.
    • Shocking no one, the XLE's 3.2% slump is leading the S&P 500's early 1.4% drop.
    • ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, UGA, USL, DNO, UHN, OLO, SZO, OLEM
    | 9:58 AM | 41 Comments
  • 9:51 AM
    • Freeport McMoRan (NYSE:FCX) has asked Indonesia to reduce or delay the $530M smelter bond the company must set aside before receiving an extension of its export permit, Indonesia's mining minister says.
    • The local Freeport Indonesia unit is seeking permission to export 1M metric tons over the next six months after its license expired last Thursday; it says mining and milling operations are continuing normally and believes the government will renew the permit.
    • FCX -3.8%.
    | 9:51 AM | 21 Comments
  • 8:56 AM
    • Horsehead Holding (NASDAQ:ZINC) files for Chapter 11 bankruptcy protection, a day before the expiration of a 30-day grace period for the $1.9M senior convertible note it failed to pay in January.
    • ZINC lists liabilities of $544.7M and total assets of $1B.
    • ZINC was hit hard by the collapse in zinc prices, as well as continued problems with getting its state-of-the-art zinc production plant up and running in Mooresboro, N.C.
    • ZINC -55.8% premarket.
    | 8:56 AM | 36 Comments
  • 8:44 AM
    • Dow Chemical (NYSE:DOW) +2.7% premarket after reporting better than expected Q4 earnings, as its increased focus on higher margin businesses such as packaging and electronics by divesting low-margin assets pays off.
    • Q4 revenues beat expectations but fell to $11.5B from $14.4B, due  mostly to price declines and adverse foreign exchange rates, partially offset by a large gain on the $5B sale of its chlorine business as well as reduced overhead costs and lower research and development spending.
    • The cost cuts helped Dow's operating margin increase by 406 bps to 20.9% in the quarter,while cost of sales fell 24% to $8.81B.
    • Operating EBITDA at Dow's plastics business, its biggest by sales, was $1.3B, up from $1.2B a year ago, due to low crude costs.
    • Dow also appoints James Fitterling as its President and COO; Fitterling is a 32-year Dowveteran, and previously held the position of Vice Chairman and COO.
    | 8:44 AM | 2 Comments
  • 7:46 AM
    • ChemChina is nearing a deal to buy a controlling stake in Syngenta (NYSE:SYT), and a deal could be announced as soon as tomorrow, WSJ reports.
    • The deal's terms are not known, but a successful transaction would represent the largest foreign acquisition by a Chinese company.
    • Monsanto kicked off the current wave of deal making in the chemicals sector last year with its unsuccessful pursuit of SYT, which has since shifted its resistance to a takeover.
    | 7:46 AM | 3 Comments
  • 7:19 AM
     
  • Monday, February 1, 2016

  • 3:58 PM
    • BHP Billiton's (NYSE:BHP) credit rating is cut to A from A+ at Standard & Poor's, reflecting changes in commodity forecasts and "very challenging market conditions and increased demand uncertainty over the coming years."
    • "The oversupply of crude oil in the market results in very weak oil and Henry Hub gas prices, which we now believe will last over the foreseeable future, putting further pressure on its balance sheet," S&P says.
    • Rio Tinto's (NYSE:RIO) A- rating could be lowered one notch in the coming weeks "if the company does not take supportive measures amid the currently weak commodity prices pressuring its cash flows", S&P also says.
    • BHP -0.8%, RIO -0.5%.
    | 3:58 PM | 6 Comments
  • 1:55 PM
    • Balchem (NASDAQ:BCPC) agrees to acquire Albion International, a privately held manufacturer of mineral amino acid chelates, specialized mineral salts and mineral complexes, for $111.5M.
    • BCPC says the  purchase price reflects a 10.7x multiple of 2015 EBITDA, excluding any synergies, and expects the deal to be immediately accretive to its EPS.
    | 1:55 PM | 2 Comments
  • 10:58 AM
    • ArcelorMittal (NYSE:MT) is backing out from construction of a proposed 6M metric tons/year still mill for India's Karnatka, and says it prefers to use the land to set up a solar farm.
    • The state industries attributes the change of plans to the global steel crash caused by the glut in Chinese production.
    • Also, MT says it is weighing the sale of some of its U.S. long steel mills, including its facility in Steelton, Pa., which is one of only three steel plants in North and South America that produce rails for railroads.
    • MT -3.9%.
    | 10:58 AM | 4 Comments
  • 9:48 AM
    • Production at Freeport McMoRan's (NYSE:FCX) Grasberg copper and gold mine in Indonesia is running at normal levels, a union official tells Reuters, as the company continues talks with the government to resolve an export spat.
    • FCX usually produces ~220K metric tons/year of copper ore from the mine, and its six-month license to export concentrate expired last Thursday after the government demanded the company first pay a $530M deposit for the construction of a new metal smelter.
    • FCX -2.4%.
    | 9:48 AM | 20 Comments
  • 9:28 AM
    • Alcoa (NYSE:AA) says it will appoint three new members to its board endorsed by 7.4% owner Elliott Management, expanding the board to 15 directors.
    • Elliott, which has supported the company’s plan to spin off its downstream assets into a separate company and has said shares were undervalued, agrees to support Alcoa's slate of director nominees at the annual shareholders meeting.
    • The nominees are Rick Schmidt, former CFO of Spirit Aerosystems; John Plant, former Chairman, President and CEO of TRW Automotive; and former Goldman Sachs banker Sean Mahoney.
    • AA +2.2% premarket.
    | 9:28 AM | 1 Comment
  • 8:29 AM
    | 8:29 AM | 20 Comments
  • Sunday, January 31, 2016

  • 9:07 AM
    • Berkshire Hathaway (BRK.A, BRK.B) has resumed its purchases of Phillips 66 (NYSE:PSX), spending roughly $832M in January to boost its stake even as the oil refiner's profit margins narrowed.
    • According to a regulatory filing, the conglomerate paid about $198M last week for 2.54M shares of PSX, giving it 72.29M overall, or a roughly 13.7% stake in the company.
    • Phillips 66 is Berkshire's sixth-largest stock holding.
    | 9:07 AM | 42 Comments
  • Saturday, January 30, 2016

  • 12:10 AM
    • Rio Tinto (NYSE:RIO) and BHP Billiton (NYSE:BHP) are preparing for Cyclone Stan’s arrival on Australia’s west coast, as the mining companies stop loading ships and evacuate workers from Port Hedland, the world’s largest bulk export terminal.
    • The cyclone is ~100 miles north of Port Hedland and advancing toward Western Australia’s Pilbara region, says the Bureau of Meteorology, which predicts the storm to strengthen and make landfall as a category 3 severe tropical cyclone by early Sunday.
    • At last report, Rio’s mine and rail operations were still functioning normally but ships have left port for safe anchorage, BHP was strapping down equipment and ordering staff to leave the site, and Fortescue Metals (OTCQX:FSUMF) was taking steps to protect its operations and workers.
    | 12:10 AM | 6 Comments
  • Friday, January 29, 2016

  • 3:24 PM
    • Eastman Chemical (EMN -4%) sinks to 52-week lows before rebounding a bit, following mixed Q4 results but a gloomy outlook from CEO Mark Costa.
    • EMN felt pressure during 2015 from lower selling prices, soft commodities markets and the strong dollar, and Costa says the company faces stagnant global economic growth, collapsing oil prices and weakening currencies in Asia and Europe in 2016.
    • "Given current business conditions, we are driving hard to deliver 2016 earnings per share that approach 2015 earnings per share," Costa says; for FY 2015, EMN posted adjusted EPS of $7.28, while the analyst consensus for 2016 is $7.57.
    | 3:24 PM
  • 12:58 PM
    • Vale's (VALE +4.8%) corporate credit rating is cut to BBB-, the lowest investment grade level, from BBB with a negative outlook by Standard & Poor’s amid weakening iron ore prices, which the ratings firm expects to continue into 2018.
    • S&P says Vale has "few lever(s) left to pull," as low iron ore prices are pushing the company to divest non-core assets at a faster speed to finance the cash flow deficit stemming from its significant capital expansion plan; even if Vale completes the sales, its net debt to EBITDA would weaken towards 6x by the end of 2016 and probably recover to 4x-4.5x only by the end of 2017.
    • Earlier: Vale seeks path to halt dividends this year (Jan. 28)
    | 12:58 PM | 7 Comments
  • 11:36 AM
    • Potash Corp. (POT +3.1%) is upgraded to Sector Outperform from Sector Perform at with an $18 price target at Scotia Howard Weil, which sees a tactical buying opportunity and says shorts should cover their positions.
    • The firm's long-term thesis is unchanged, still seeing a widening supply and demand gap, with POT's 34% dividend cut to $1 insufficient beyond 2016 as flexibility is limited for M&A and/or buybacks; that said, "when POT 'kitchen sinks' its own outlook (the right thing to do), and the market doesn't care at all, even the bears have to take notice."
    • Meanwhile, RBC cuts its share price target to $16 from $19, expecting cash generation will cover dividend requirements but sustainability concerns will linger in the background until nutrient prices improve (Briefing.com).
    | 11:36 AM | 12 Comments
  • 8:31 AM
    • Axiall (NYSE:AXLL) +73.4% premarket after Westlake Chemical (NYSE:WLK) announces it offered to acquire the company in a cash and stock deal valued at $2.9B, including the assumption of ~$1.5B of debt.
    • WLK says its proposal was "summarily rejected" by AXLL's board.
    • WLK says it offered $20.00/share, a 108% premium to AXLL's closing price of $9.60 on Jan. 22, the last trading day before WLK made its proposal; the deal comprised of $11/share in cash and 0.1967 of a WLK share, which represented a value of $9 based on WLK's Jan. 22 closing price.
    | 8:31 AM | 8 Comments
  • 8:04 AM
    • Endeavour Silver (NYSE:EXK) says it will cut silver production by more than 25% this year amid low prices, as it seeks to achieve a substantially lower all-in sustaining cost of production and generate free cash flow.
    • EXK projects that 2016 silver production will total 4.9M-5.3M oz., down by more than a quarter vs. 2015 output of 7.2M oz.; gold production should come in at 47K-52K oz., and silver equivalent production is forecast at 7.9M-8.5M oz.
    • EXK operates three mines in Mexico, the world's biggest silver producing country.
    | 8:04 AM | 5 Comments
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