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Fri, Jan. 15, 10:34 AM
- Shares in global mining companies face their biggest back-to-back weekly losses in four years after signs of slowing growth in China, plunging oil prices and asset writedowns at BHP Billiton spark a selloff.
- Copper prices hit a six-year low for the fifth time in a week in London, -1.9%, amid worries about China’s economy, and are now down nearly 9% YTD; aluminum, lead, nickel and zinc all fell more than 1%.
- Long-dated “copper prices adjusted for producer country FX are mostly unchanged, which underscores the macro nature of the recent declines,” according to Goldman Sachs.
- "No lasting price recovery appears possible at present, neither on the metal markets nor on the commodities markets in general," Commerzbank says.
- BHP -7.7%, RIO -6.4%, OTCPK:AAUKF -5.7%, VALE -5.5%, FCX -5.4%, OTCPK:GLCNF -4.4%, TCK -4.3%, SCCO -1.1%.
- ETFs: JJC, DBB, JJN, JJU, CPER, JJT, BOM, RJZ, BOS, FOIL, JJM, LD, BDD, NINI, CUPM, LEDD
Tue, Jan. 12, 12:46 PM
- BHP Billiton (BHP -4.3%) could cut is payout in half when it releases results, and Rio Tinto (RIO -4.5%) also could cut its dividend later this year, HSBC analysts say, citing the need for the miners to cut expenses to help indebted balance sheets and offset weak commodities prices.
- HSBC also says Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) and First Quantum Minerals (OTCPK:FQVLF) are most at risk if commodities remain weak, although continued South African rand weakness would help Anglo, while strength in copper and other stock-specific reasons could favor returns for Freeport McMoRan (FCX -13.4%) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY).
- The firm downgrades BHP and First Quantum to Reduce, maintains a Reduce rating on Anglo, and has a Buy rating on FCX and Glencore.
Dec. 23, 2015, 9:19 AM
- Mining stocks look to be headed for a strong day, following a rebound in metal prices after China earlier this week raised hopes that demand may strengthen next year when it unveiled plans for more flexible fiscal and monetary policies.
- Prices for industrial commodities including copper, zinc, lead and aluminum are up at least 1%.
- Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) +8.1%, Glencore (OTCPK:GLCNF, OTCPK:GLNCY) +6.7% in London.
- MT +10.2%, RIO +5.4%, VALE +4.8%, BHP +4.5% in U.S. premarket.
Nov. 12, 2015, 8:59 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) tumbles below £1 for the first time in a month as a renewed selloff in the stock accelerates and copper prices trade near six-year lows.
- Glencore is "very geared into the copper price,” says an analyst at Liberum Capital. “Prices are obviously taking a hit on the back of U.S. dollar strength and the Fed’s clear intention to raise rates before the end of the year."
- Rival mining company Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) is 9% lower in London trading to its lowest level since 1999.
Oct. 12, 2015, 11:38 AM
- X2 Resources, the P-E firm founded by former Xstrata CEO Mick Davis, has emerged as the last remaining bidder for control of two Rio Tinto (RIO -2.2%) coal mines in Australia perhaps worth more than A$3B ($2.2B), Bloomberg reports.
- X2 is progressing in negotiations with Rio as other interested parties, including Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and New Hope Corp., are no longer in talks to buy the assets in New South Wales state’s Hunter Valley region, according to the report.
- The two Rio operations - Hunter Valley and Mount Thorley Warkworth - produced more than 20M metric tons of thermal coal in 2013 and 5.6M tons of semi-soft coking coal during 2013.
Oct. 7, 2015, 7:58 AM
- Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP) and Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) soar near the top of U.K.'s FTSE 100 after Morgan Stanley upgraded the metal and mining sector to Attractive, saying valuations are at historically attractive levels.
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) also is higher after saying it closed its Eland platinum mine in South Africa, resulting in 970 job losses.
- Stanley sees commodity prices rising 19% by 2017, which would be "a sharp reversal from the experience in the last 18 months," and believes the recent acceleration of financial and administrative stimulus policies in China "will start to feed through in both actual activity levels and equity market expectations."
- The firm raises its recommendation for Rio and to Overweight from Equal Weight and for Anglo to Equal Weight from Underweight.
- In the U.S. premarket, RIO +8.7%, BHP +4.1%.
Oct. 6, 2015, 10:34 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) continues to push back against critics, saying that in the event of rating downgrade, the ratings' grid in its $6.8B five-year revolving credit facility would provide only a "modest" additional margin step-up.
- Glencore also says it has $4.5B of bonds outstanding, where a margin step-up of 125 basis points would apply if they were rated sub-investment grade by the agencies.
- Meanwhile, Investec is not backing off its gloomy view that recently helped to hammer Glencore shares, saying the company blames everyone else for its woes; yesterday, Glencore urged rivals to shut loss-making mines and blamed hedge funds for wilting commodities prices.
- Shares continue their roller-coaster ride in London trading, falling as much as 8% earlier but now +2.3% to its highest level in two weeks.
Oct. 5, 2015, 12:57 PM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) jumped 21% in London trading today, capping a 68% rally over the five past sessions following reassurances from management and speculation of asset sales.
- Over the weekend, The Telegraph reported Glencore would listen to takeover offers, even as management does not believe there are any buyers willing to pay a fair value for the business in the current market.
- Additionally, CEO Ivan Glasenberg says in his first public remarks since Glencore’s shares plunged a week ago that he believes copper prices ultimately will rise as mine supplies are pulled from the market, and "fundamentals will prevail" over hedge funds that he says have artificially pushed copper prices lower.
- Glasenberg says the company’s plans announced last month to take 400K tons out of the market with the shutdown of two copper mines in Africa "should have an effect on the price" as demand ultimately outweighs supplies.
Oct. 2, 2015, 7:58 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) +4.3% in London trading on reports that its agriculture business is attracting interest from Singapore's sovereign wealth fund, Japanese trading houses such as Mitsui and at least one Canadian pension fund.
- Citigroup, one of the banks hired to run the sale alongside Credit Suisse, said earlier this week the business could be worth as much as $10.5B.
- As part of negotiations with potential buyers, Glencore is said to be considering a plan that will carve out its agriculture business as a stand-alone company with its own capital structure, incorporating the unit in Singapore.
- Also, Barclays analysts say Glencore officials have stressed they are not worried about a possible credit rating downgrade, a factor that has weighed heavily on the companys share price in recent days.
Oct. 1, 2015, 4:36 AM
- Looking to reduce its massive debt, Glencore (OTCPK:GLCNF) is in discussions with sovereign-wealth funds and Asian trading houses about selling up to a third of its agricultural business, which could be valued at $12B, the WSJ reports.
- Glencore is also in negotiations over $1.5B in streaming deals in which the company would sell the rights to future royalties from its gold and silver operations in return for cash upfront. Vancouver-based Silver Wheaton (NYSE:SLW) could be a candidate for such deals.
- The potential transactions are part of Glencore's plan to reduce its $30B in net debt by $10B by the end of 2016.
- In South Africa, Glencore is axing another 340 jobs as it shuts depleted coal mines.
- Shares are +5.6% at 96.7 pence in London and have recovered the losses made in Monday's 29% collapse.
Sep. 30, 2015, 12:48 PM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) gained another 14% in London trading today, recouping most of the losses from Monday’s 29% plunge as shares rebounded for a second day on higher metal prices and speculation the stock is cheap.
- J.P. Morgan analysts say the recent selloff was excessive and Glencore is undervalued at current commodity prices, while also warning that more capital may be needed to eliminate credit risks.
- Fears about the company's exposure to weak commodity prices from its huge trading operation also were overblown, since Glencore hedges much of its risk through counterparty transactions on all trades, says Charl Malan, senior metals and mining analyst at Van Eck Global.
- Glencore also republished a statement first issued Tuesday in which it said its business "remains operationally and financially robust," now adding that it is delivering measures to reduce its debt levels by up to $10.2B.
- The stock is still this year’s worst performer on the U.K.’s FTSE 100 Index, down 69%.
Sep. 30, 2015, 5:19 AM
- Glencore's (OTCPK:GLCNF) shares have continued their recovery from Monday's 29% plunge, climbing 13.4% in London today following a surge of 17% yesterday after the commodities trader put out a statement reassuring investors that it is financially robust and has no solvency problems. It's also helping that metals are broadly higher today.
- However, Bloomberg calculates that Glencore will have to refinance a quarter of its $13.8B in bonds and credit lines by next May. While the company may be able to extend some of the deadlines, any bond refinancing is likely to be expensive given that some of the firm's debt is trading as junk.
- The rout on Monday was caused by fears about Glencore's ability to manage its debt burden amid the slump in commodities prices.
- Bloomberg also reports that Glencore was due to hold meetings and conference calls with bond investors today in London.
Sep. 29, 2015, 9:41 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) follows yesterday's nearly 30% plunge with a 20% rebound in London trading today, as the company says its business remains "operationally and financially robust" and it is confident of the medium and long-term fundamentals of its commodities.
- "We have positive cash flow, good liquidity and absolutely no solvency issues,” the company says. “Glencore has no debt covenants and continues to retain strong lines of credit and secure access to funding."
- Shares already were higher as analysts said yesterday's rout probably did not reflect the company’s true value and Citigroup said management should consider taking the company private.
- But others are beginning to warn of the dire financial impact across the mining and metals space if Glencore is unable to control its debt; "Glencore is like Lehman Brothers... they're not just a company processing ore from the ground. If it was to unravel, that could have a global impact," says U.S. Global Investors CEO Frank Holmes.
Sep. 29, 2015, 3:41 AM
- Glencore (OTCPK:GLCNF) shares jump 8.1% in London after collapsing 29% yesterday to a record low amid fears that the company's debt burden won't allow it to survive the rout in commodity prices.
- Despite this morning's rally, the stock is down around 75% this year.
- "Glencore is now under pressure to strengthen its balance sheet via asset sales or a capital injection, and time is of the essence," says analyst Jefferies Chris LaFemina. "There is value in Glencore shares if the company can pull the appropriate levers now, but risks are clearly very high."
Sep. 28, 2015, 2:48 PM
- It isn't just Glencore (OTCPK:GLCNF, OTCPK:GLNCY) who is tanking, as at least one measure of raw materials producers plunges to seven-year lows following the company's woes and data that showed weakening Chinese industrial profits.
- Shares of Glencore plunged 29% to close at just 69 pence, an all-time low, exaggerated by a damning report that said future earnings are so uncertain that the company may need to direct all of its efforts to repay debt.
- Freeport McMoRan (FCX -10.2%) is hit hard after breaking below support at $10/share, and global mining peers Rio Tinto (RIO -4.1%), BHP Billiton (BHP -4.5%) and Vale (VALE -9.4%) also are smacked down.
- A number of other firms also are in situations not that much different from Glencore, says DTN analyst Darin Newsom, noting that Caterpillar (CAT -2.2%) and Deere (DE -1.6%) have been struggling and adding that pressure on Glencore may “create a vacuum those other struggling companies could get sucked into."
- Along with oil and gas producers and precious metals miners, even financial stocks are affected, with Morgan Stanley (MS -3.6%) and Goldman Sachs (GS -3.4%) underperforming their banking peers, perhaps as investors grow nervous about the potential for any of Glencore's problems possibly blowing back on other commodity trading operations.
Sep. 28, 2015, 4:44 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is down by 14.6% in London action to a new all-time low amid more weak economic data out of China and a report from Investec suggesting the company's high debt levels means equity valued could be wiped out if commodity prices stay where they are.
- In line with its just-announced plan to sell assets and pay down debt, the company agrees to unload its Araguaia nickel project in Brazil for $8M to Horizonte Minerals.
- Horizonte is already developing a nickel project in that area of the country, and this purchase will allow it to combine Glencore's operations with its own.
- Previously: Glencore leads European gains on plans to cut debt (Sept. 7)
Glencore Xstrata is one of the worlds largest global diversified natural resource companies and is one of the ten biggest companies within the FTSE 100 Index. The Groups industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries.
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