Seeking Alpha

Big miners aren’t panicking yet about the latest commodity drop

  • While steep drops in copper, iron ore and coking coal prices have spooked investors, KGHM chief Derek White says there's no need for mining executives to panic - at least not yet.
  • There's no real threat to copper mining operations at a long-term copper price ~$3/lb., White says, but that could change if the price drops below $2.50 for a prolonged period.
  • Iron ore prices have performed better than expected in recent years, and this week’s drop brings them closer to many forecasts; analysts believe most iron ore projects are fine at a long-term price above $100/metric ton.
  • Coking coal's current $110/metric ton is still not low enough to disrupt most operations, with some exceptions; TD Securities expects Teck Resources (TCK) to defer its Quintette project in British Columbia until the market recovers.
  • ETFs: XME, COPX, CU, JUNR, PICK, JJC, DBB, CPER, RJZ, BOM, BOS, JJM, BDD, CUPM, RGRI, UBM, BDG, USMI, HEVY
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Comments (3)
  • john001
    , contributor
    Comments (720) | Send Message
     
    sounds like advise from Hitchhiker's Guide to the Galaxy...don't panic.
    12 Mar, 07:28 PM Reply Like
  • WallStreetStoic
    , contributor
    Comments (16) | Send Message
     
    The coal miners need to cut back significantly on production to remove excess supply from the market. Until this is done, met (and seaborne thermal) coal prices don't stand a chance of moving higher. When this will occur is anyone's guess though.

     

    Disclosure: I'm long BTU, CLD, TCK.
    12 Mar, 09:58 PM Reply Like
  • 777rookie
    , contributor
    Comments (4) | Send Message
     
    With you wallstreetstoic -- long CLD and TCK
    13 Mar, 03:05 AM Reply Like
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