Seeking Alpha
  • Thursday, October 23, 2014

  • 4:52 PM
    • The U.S. will not move forward with planned import duties on specialized steel from China, South Korea, Russia and other countries after the U.S. International Trade Commission found the imports were not harming local industry.
    • Imports of grain-oriented electrical steel from China had faced the prospect of the highest duties after an earlier Commerce Department determination that they were being sold in the U.S. too cheaply and were being produced using unfair government subsidies.
    • AK Steel (NYSE:AKS) and Allegheny Tech (NYSE:ATI), who had lodged the complaints, say they will appeal USITC decision.
    | 1 Comment
  • 3:30 PM
    • The giant ($30B in assets) SPDR Gold Trust (NYSEARCA:GLD) earlier this week saw its largest one-day decline in holdings (down 1.2%) this year. Instead of exiting gold altogether, some of the money may just be heading into other vehicles as the Merk Gold Trust (NYSEARCA:OUNZ) - with market cap of just $60M - today is reporting assets rising by 5.4%, bringing total AUM to the highest since the fund's May launch.
    • Like with GLD or IAU, owners of OUNZ have the option of exchanging their shares for physical gold, but OUNZ allows redemptions as small as one troy ounce (in GLD's case only blocks of 100K shares can be exchanged for gold).
    • ETFs: GLD, IAU, SGOL, UGL, DGP, GLL, UGLD, DZZ, GLDI, DGL, DGZ, OUNZ, DGLD, AGOL, TBAR, UBG, GLDE, BAR, GYEN, GEUR, BARS, GGBP
    | 5 Comments
  • 9:59 AM
    • Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) reports a 37% Y/Y increase in Q3 iron ore production to 13M metric tons, joining larger rivals such as Vale in increasing output to grab market share even as prices fall.
    • CEO Mark Cutifani says Anglo will press on with its much-delayed Minas Rio iron ore project in Brazil, which is expected to deliver its first ore later this year.
    • Raises its forecast for full-year output at its Kumba Iron Ore subsidiary to 45M-46M metric tons from 44-46M.
    • Copper output fell 15% Y/Y due to a decline in the grades of ore at two of the company's main Chilean mines, thermal coal production fell 4% because of bad weather in Colombia, and platinum production dropped 14% as Anglo continues to shake off the effects of a five months-long strike earlier this year.
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  • 9:43 AM
    | 1 Comment
  • 9:14 AM
    • Potash Corp. (NYSE:POT+1.2% premarket after reporting an 11% drop in Q3 earnings and missed analyst estimates, but the results were within the company's prior guidance.
    • POT says it sold 2M metric tons of potash in Q3, up 29% Y/Y, but its average realized price was US$281/ton vs. US$307 in Q3 2013.
    • Says global potash shipments reached an all-time high in the first nine months of 2014 amid rising prices, and nitrogen and phosphate prices also have improved as demand has been strong.
    • Increases its estimate for potash annual sales volumes to 9M-9.2M metric tons; sees 2014 worldwide potash sales of 58M-60M tons, above its prior guidance.
    • Issues in-line FY 2014 EPS guidance, seeing $1.75-$1.85 from prior $1.70-$1.90 vs. $1.82 analyst consensus estimate.
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  • 8:34 AM
    • Vale (NYSE:VALE) -2.3% premarket after saying its Q3 iron ore output rose 3.1% to 85.7M metric tons from 83.1M tons a year ago and is on track to set a record for the year despite plunging prices.
    • Output beat the previous quarterly record of 85M tons set in Q3 2011; YTD, iron ore output has climbed 8.1% at 236.2M tons, the highest ever.
    • Q3 iron ore shipments fell by 3.6M tons due to protests at its cargo railroad out of Carajas in September, resulting in a 9.3M ton increase in iron ore global stocks.
    • Q3 nickel production rose 16% Y/Y to 72.1K tons after the company brought the Onça Puma mine in Brazil online this year.
    • Copper output rose 11% to 104.8K tons, and coal production fell 1.5% to 2.34M tons.
    | 2 Comments
  • 7:55 AM
    • Rio Tinto (NYSE:RIO) extends the tenure of CEO Sam Walsh and CFO Chris Lynch, rewarding them for restoring capital discipline after a run of writedowns from soured acquisitions and eliminating a layer of uncertainty after the company recently became a takeover target of Glencore.
    • Walsh and Lynch will be moved to open-ended contracts after the annual general meetings in Australia and the U.K. next year.
    • RIO -0.8% premarket.
    | 1 Comment
  • Wednesday, October 22, 2014

  • 3:53 PM
    • Coeur Mining (CDE -14.1%) plunges after BMO Capital downgrades shares to Underperform from Market Perform and slashes its stock target price to $4 from $9.50, pointing out signs of "strained" valuation.
    • The downgrade comes as BMO describes its view that silver will continue to underperform gold over the next 12 months, and that silver miners "will need to look increasingly toward grade as a mechanism to reduce unit costs at the expense of reserve life."
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  • 3:44 PM
    • Dow Chemical (DOW -0.8%) CEO Andrew Liveris said during today's earnings conference call that he has been continuing to speak with Dan Loeb of Third Point Capital and other shareholders about how to raise Dow’s share price.
    • Liveris denied any "adversarial” relationship with Loeb and promised to listen to his analysis, agreed with Loeb that Dow needs to "show where we’re making money," and suggested an investor day next month would offer greater clarity.
    • The CEO added that Dow was close to reaching a “running rate” of EBITDA of $10B/year “in the near term," an objective the company first set in 2009.
    • Falling oil prices have sparked investor concerns about Dow and other U.S. petrochemical manufacturers, but Liveris said the plunging prices will stimulate national economies and help rather than hurt its plastics business next year.
    | 1 Comment
  • 2:44 PM
    • Crude inventories rose 7.1M barrels for the week ended October 17, according to the EIA, vs. expectations for a 2.7M jump. Helping boost inventories were fewer refinery runs - down 113K barrels per day with utilization rates dropping 140 basis points to 86.7%. In the Midwest, utilization rates are the lowest for this point in the year since 2010.
    • WTI crude oil last week briefly dropped under $80 per barrel for the first time since the summer of 2012, and it's testing that level again today, -2.9% to $80.36. USO -2.4%
    • Gasoline (UGA -2.2%) stockpiles fell 1.3M barrels vs. expectations for a 1M barrel drop, and distillates (UNH -0.8%) rose 1M barrels vs. expectations for a 1.3M barrel decline.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, CRUD, USL, UWTI, DNO, DWTI, SZO, OLO, OLEM, TWTI
    | 5 Comments
  • 2:43 PM
    • P-E firms are coveting Bayer's (OTCPK:BAYZF, OTCPK:BAYRY) €10B ($12.7B) plastics business, hoping to sway the German drugmaker from its plan to list the division in an IPO, Reuters reports.
    • Advent, Carlyle and KKR reportedly are among P-E firms, as well as sovereign wealth funds and pension funds, considering MaterialScience after Bayer said in September that it planned to spin off the division through a stock listing.
    • Market conditions for IPOs have weakened in recent weeks, forcing a number of companies to pull their listings and potentially heightening the attractiveness of a sale to P-E firms.
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  • 11:59 AM
    • Norwegian fertilizer producer Yara (OTCPK:YARIY -1.6%) reports a 9% Y/Y rise in net profit on rising revenue, and says it will invest 2.25B kroner ($343M) to boost production capacity at the Porsgrunn plant in Norway.
    • Yara's Q3 net profit totaled 1.71B kroner vs. 1.57B in the year-ago quarter but short of analyst consensus estimate of 2.24B kroner.
    • Q3 revenue totaled 24.1B kroner, above 20.6B a year ago and expectations this quarter for 21.6B; EBIT was 2.76B, up from 2.39B a year ago but below expectations of 3.16B.
    | Comment!
  • 10:43 AM
    • BHP Billiton (BHP -1.1%) is the latest company to report record output of metallurgical coal, as extra supply far outpaces demand in countries such as China and Japan, which produce much of the world’s steel.
    • BHP says it produced a record 12.8M metric tons of met coal in Q3 - including output from the major new Caval Ridge mine in Australia - up 7% Q/Q and 25% Y/Y, and Anglo American’s (OTCPK:AAUKF, OTCPK:AAUKY) H1 2014 met coal production jumped 21% Y/Y.
    • The willingness to dig up more coal (NYSEARCA:KOL) despite lower prices mirrors a similar push in iron ore, where global miners miners are investing and producing more in a bet that their efficiencies of scale will allow them to profit, but critics say the strategy risks creating supply gluts that will take years to clear.
    • The price for Australian premium hard coking coal has dropped 16% this year to $110/ton, near the lowest level in more than seven years and well below the $300/ton fetched in early 2011.
    | Comment!
  • 10:19 AM
    • Taseko Mines (TGB -0.6%) believes Canada's government acted unlawfully in rejecting its New Prosperity copper project in British Columbia, so it is suing the Ottawa government for damages and to find out what happened.
    • TGB appears in a federal court in Vancouver today to argue that its two judicial review applications to Ottawa should be combined into one civil suit seeking damages, in a move that appears to be unprecedented and is fiercely opposed by the government.
    • TGB says it has evidence of actual malfeasance by federal officials, including secret meetings with opponents of the $1.5B project that could have swung Ottawa’s decision.
    • If TGB’s request for a civil suit is granted, the miner would have a greater ability to force disclosure of the documents, in addition to the potential damages.
    | 1 Comment
  • 9:46 AM
    • Cliffs Natural Resources (CLF +5.5%) opens sharply higher after Credit Suisse, a longtime bear on the stock, now says it is bullish ahead of next week's earnings report and that the magnitude of CLF's cost-cutting efforts is likely to surprise the Street.
    • Credit Suisse believes the total cuts could be worth more than $300M in EBITDA, and it thinks Q3 trade data also looks strong.
    • The firm says it is time to cover shorts, and that's no small matter with 44% short interest in CLF.
    | 6 Comments
  • 8:10 AM
    • Dow Chemical (NYSE:DOW) +3.2% premarket after reporting a 44% Y/Y rise in Q3 earnings, which also beat analyst expectations.
    • Performance plastics, Dow’s biggest revenue driver, posted an 8.5% sales gain to $3.92B, performance materials sales rose 8% to $3.57B, and feedstocks and energy segment sales gained 2% to $2.4B.
    • Sales rose in all geographic areas; sales in developed geographies gained 4%, led by North America, where sales rose 7%.
    • EBITDA rose 24% to $2.3B, while adjusted EBITDA margin widened more than 240 bps to 15.9%.
    | 2 Comments
  • Tuesday, October 21, 2014

  • 7:28 PM
    • BHP Billiton (NYSE:BHP) reports Q3 production numbers showing the iron ore and coking coal divisions performed as well as or better than expected, as overall production rose 9% Y/Y with records achieved for eight operations and four commodities.
    • The 62M metric tons produced by BHP's Pilbara iron ore division means the business is ahead of schedule on its target to produce 245M metric tons in FY 2015.
    • Produced a better than expected 13M tons of met coal, a 25% increase, as Queensland Coal achieved record quarterly production and sales volumes.
    • Petroleum production gained 7% to 67.4M boe, as onshore U.S. liquids volumes jumped 49% to a record 11.5M boe.
    • Full year production guidance remained in line with prior guidance for iron ore, copper, petroleum and both types of coal.
    | Comment!
  • 6:11 PM
    • Kinross Gold (NYSE:KGC) agrees to sell its mothballed Fruta del Norte gold project in Ecuador to Fortress Minerals (OTC:FTMNF) for $240M in cash and equity.
    • The sale is a relief for KGC, which was forced to write down the project after clashing with the Ecuadorian government on the economic terms.
    | Comment!
  • 3:13 PM
    • Jefferies lowers its commodity price forecasts, cuts 2015 earnings estimates for mining companies it covers by an average of 21%, and downgrades BHP Billiton (BHP +0.6%) to Hold from Buy but maintains a Buy rating on Rio Tinto (RIO +1.5%) and a Hold on Vale (VALE +1.1%).
    • The firm expects BHP to outperform over the very long-term but sees limited upside potential over the next 6-12 months, with shares now trading at a premium on price/NPV; BHP also has limited scope to materially grow its dividend over the next year.
    • Jefferies maintain its Buy rating on RIO based on relative valuation as well as capital return potential, high return on capital invested and strong free cash flow even in a weaker iron ore price environment.
    | 1 Comment
  • 12:57 PM
    • Almaden Minerals (AAU +2.3%) says it is reorganizing its structure and will spin off its early-stage exploration projects, royalty interests and certain other non-core assets.
    • AAU says it is undertaking the reorganization to focus on the development of its Ixtaca gold-silver deposit in Mexico, and will allow the market to value Ixtaca independently of its early stage mineral exploration and royalty business.
    | 1 Comment
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