• Wed, Jan. 11, 3:46 PM
    • The central bank slashed its benchmark rate a full 75 basis points to 13% vs. expectations of just a 50 point move.
    • Down earlier, the Bovespa is now higher by 0.5%.
    • The iShares MSCI Brazil Index ETF (NYSEARCA:EWZ) was also lower earlier, but now up 1.65%.
    • Vale (VALE +3.5%), Petrobras (PBR +3.5%), Banco Bradesco (BBD +3%), Itau Unibanco (ITUB +1.9%), Banco Santander Brasil (BSBR +1.9%), Gol Linhas (GOL +3.6%)
    • ETFs: EWZ, BRF, BRZU, EWZS, BZQ, BRAQ, BRAZ, UBR, DBBR, FBZ
    Wed, Jan. 11, 3:46 PM | 13 Comments
  • Tue, Jan. 10, 2:27 PM
    • Producers of copper, iron ore, steel and aluminum are trading higher following pledges from China's top steelmaking province to further cut production capacity.
    • Shanghai steel futures jumped 7% overnight to their highest in nearly three weeks, with iron ore and coking coal climbing ~8%, on reports that Hebei province, which accounts for 25% of China's total steel output, plans to more than double this year's cut to 31.86M metric tons of steel and ironmaking capacity this year.
    • Also, London copper rose 3% to $5,755/metric tons, extending YTD gains to nearly 5%, on news that China’s producer prices had surged in December.
    • In today's trade: FCX +4.3%, MT +6.3%, CLF +8.4%, VALE +7.1%, RIO +6%, BHP +4.1%, SCCO +2.2%, X +3.9%, AKS +5.6%, NUE +2.2%, AA +4.8%, CENX +4.3%.
    • ETFs: JJC, SLX, COPX, DBB, CU, JJU, CPER, BOM, BOS, RJZ, BDD, FOIL, JJM, CUPM, BDG, UBM, HEVY
    Tue, Jan. 10, 2:27 PM | 39 Comments
  • Tue, Jan. 3, 1:04 PM
    • By sector, the list is dominated by commodity producers. By country the list is dominated by commodity producer Brazil, whose previously roughed-up Bovespa roared higher in 2016.
    • Russia's Mechel (NYSE:MTL) gained 267%, Brazil's Co. Siderurgica National (NYSE:SID) +242%, Brazil's Gerdau (NYSE:GGB) +178%, Peru's Co. de Minas Buenaventura (NYSE:BVN) +175%, Glencore (OTCPK:GLNCY) +164%, Petrobas (NYSE:PBR) +153%, Brazil's GOL Linhas Aereas (NYSE:GOL) +152%, Vale (NYSE:VALE) +140%, Banco Santander Brasil (NYSE:BSBR) +139%, India's Vedanta (NYSE:VEDL) +129%, Sberbank Russia (OTCPK:SBRCY) +118%, Brazil's Cosan Limited (NYSE:CZZ) +115%, Brazil's CPFL Energia (NYSE:CPL) +115%, Weibo (NASDAQ:WB) +113%.
    Tue, Jan. 3, 1:04 PM | 19 Comments
  • Dec. 21, 2016, 9:08 AM
    • Vale (NYSE:VALE) says it signed an agreement with BHP Billiton (NYSE:BHP) to allow the use of its Timbopeba pit to deposit tailings from the jointly owned Samarco venture when operations are restarted.
    • The deal, which is pending commercial negotiations and government approvals, is the latest step for Samarco to resume operations suspended last year after the collapse of a tailings dam caused Brazil's worst-ever environmental disaster.
    • In compensation for the transfer of the pit, Vale says Samarco will supply it with non-processed ore.
    Dec. 21, 2016, 9:08 AM | 4 Comments
  • Dec. 20, 2016, 2:24 PM
    • Vale (VALE +2.6%) and Mosaic (MOS +0.5%) recoup a bit of yesterday's losses following the Brazilian company's $2.5B sale of its fertilizer business that also makes it MOS's biggest shareholder.
    • The price paid and the leverage involved "could prove too high/risky, though we understand the 'once-in-a-lifetime opportunity' to acquire large assets in the fastest growing agriculture/fertilizer market," says Michael Underhill, chief investment officer of Capital Innovations, a MOS shareholder.
    • Analysts at Banco BTG Pactual estimate MOS is paying 8.6x the fertilizer division's EBITDA, calling it an attractive multiple.
    • MOS says it expects the deal to add to EPS by 2018, and the Brazilian unit will become the company's largest by trading volume, surpassing North America, although the North Americas unit will still lead in production.
    Dec. 20, 2016, 2:24 PM | 8 Comments
  • Dec. 19, 2016, 2:37 PM
    • Vale (VALE -4.7%) this weekend opened the S11D iron ore mine in Brazil - its biggest project ever, adding 75M metric tons of production when it reaches peak output in four years and firmly lifting Vale over Rio Tinto as the world's top iron ore producer.
    • Vale invested $14.3B in the mine and processing facilities, along with the expansion of a rail line that will carry ore ~620 miles to a new port terminal for loading onto the world's largest iron ore ships.
    • S11D will offer some of the best quality ore and lowest costs in the industry, able to produce 90M metric tons/year at full capacity a cost of ~$7/ton, or 41% less than Vale’s current average expense; the mine has a life expectancy of 30 years.
    Dec. 19, 2016, 2:37 PM | 7 Comments
  • Dec. 19, 2016, 11:28 AM
    • Mosaic (MOS -4.6%) and Vale (VALE -3.5%) are both trading lower after the ag giant buys most of the fertilizer chemicals business of the Brazilian miner in a cash and stock deal valued at $2.5B.
    • MOS will pay for the deal with $1.25B in cash, which it plans to raise through debt, and 42.3M newly issued common shares, or a ~11% stake in the company.
    • Rumors had swirled for months that MOS could buy Vale's fertilizer business, with some reports speculating a $3B price tag.
    • Analysts at Banco BTG Pactual estimate MOS is paying 8.6x the fertilizer division's EBITDA, which they say is "an attractive multiple for Vale."
    • Brazil already is MOS's largest international market, generating $2.14B in net sales in 2015, or 24% of the company's total for the year.
    • Vale says it will retain its nitrogen and phosphate fertilizer assets in Cubatão, Brazil, which generated $108M in cash flow during 2015, but it expects to sell them in 2017.
    • Vale has been selling assets to help meet a $10B debt reduction target by next year.
    Dec. 19, 2016, 11:28 AM | 9 Comments
  • Dec. 16, 2016, 6:48 AM
    • A planned alliance between iron ore producers Vale (NYSE:VALE) and Fortescue Metals (OTCQX:FSUMF) may unravel, Fortescue CEO Nev Power says.
    • Fortescue and Vale had wanted to create an ore blend for sale in China, which was expected to boost profits and help develop new projects, but the CEO says talks between the companies have yet to bear fruit because low shipping rates have leveled the playing field between exporters in Brazil and Australia, the world's two top iron ore production hubs.
    • But Power says a failure to develop a new blend of the companies' ores will not stop Fortescue, which also announces that it will pay off another $1B in debt amassed when building its Australian mines.
    Dec. 16, 2016, 6:48 AM | 3 Comments
  • Dec. 12, 2016, 6:35 AM
    • A Brazilian judge has given Vale (NYSE:VALE) another 30 days to deposit part of 1.2B reais ($355M) in reparation guarantees related to a dam accident at Samarco.
    • The world's No. 1 iron ore producer halted operations almost 13 months ago following a deadly dam break that destroyed a city and killed 19 people.
    • Vale has reiterated its support for Samarco, in which it and BHP Billiton (NYSE:BHP) each own a 50% stake.
    Dec. 12, 2016, 6:35 AM | 6 Comments
  • Dec. 9, 2016, 2:38 PM
    • Brazil's environment regulator approves a 10-year operating license for the S11D iron ore mine being constructed by Vale (VALE -2%).
    • The mine will have a capacity of 90M metric tons and reasserts Vale's position as the world's top iron ore producer after years of stagnation; it is expected to start operations by year-end, with the first shipment set for January 2017.
    • The license is "an important milestone in consolidating Vale's position as the producer with the lowest C1 cash cost in the industry," the company says.
    Dec. 9, 2016, 2:38 PM | 3 Comments
  • Dec. 1, 2016, 3:44 PM
    • Prosecutors pursing corruption at Petrobas (PBR -2.9%) have threatened to resign over a bill being fast-tracked through Congress which would allow prosecutors and judges to be the focus of charges.
    • Source: FT
    • The new law, say some (prosecutors and judges) will have the effect of curbing investigations. Analysts say the bill is an attempt by lawmakers to stop the Petrobras probe from spreading to them.
    • President Michel Temer has not yet committed as to whether he would sign the bill.
    • The Bovespa is lower by 3.9%. EWZ -5.9%, VALE -2.9%, ITUB -6.2%, BSBR -10%
    Dec. 1, 2016, 3:44 PM | 12 Comments
  • Nov. 30, 2016, 11:18 AM
    • Iron ore prices fell today by the most since March, extending a retreat from a two-year high, as China’s exchanges lowered the daily trading limit and raised margin requirements in a bid to clamp down on speculation.
    • Ore with 62% content delivered to Qingdao fell 6.8% to $72.08/ton after hitting $80.83 on Monday, the highest since October 2014 and culminating a 65% YTD surge.
    • Despite the steps to tighten trading rules, "the basics that are driving that speculation - the search for higher yielding assets and the desire to hold U.S. dollars at a time for a weaker yuan - have not changed,” says Westpac Banking economist Justin Smirk. “As such, we would expect to see significant volatility for some time.
    • Relevant tickers: BHP, RIO, VALE, OTCQX:FSUMF.
    Nov. 30, 2016, 11:18 AM | 7 Comments
  • Nov. 29, 2016, 2:34 PM
    • Improved iron ore recovery and price realization may help Vale (VALE -5.9%) generate $2.2B next year in free cash flow and accelerate debt reduction plans, CEO Murilo Ferreira tells investors.
    • Ferreira and other company execs expect the announcement soon of several, unnamed asset divestitures that could help Vale trim net debt to $15B-$17B next year.
    • "The key message is that we are in a much more comfortable position to be very thoughtful about... divestitures," CFO Luciano Siani says.
    • Cost-cutting efforts are helping to ease Vale's capital spending needs for the years ahead, as the company says it is lowering its budget for planned investments to $4.5B next year and $2.9B in 2021 from an expected $5.6B this year.
    • For next year, Vale expects to produce 360M-380M metric tons of iron ore, with a target of 400M-450M metric tons in 2021.
    • Vale also says it hopes to restart operations in mid-2017 at its Samarco joint venture with BHP Billiton, which has been shut down since a fatal tailings dam failure in November 2015.
    Nov. 29, 2016, 2:34 PM | 3 Comments
  • Nov. 29, 2016, 8:33 AM
    • Rio Tinto (NYSE:RIO) is asking Chinese steel mills to pay a premium for its highest grade iron ore product for the first time since 2010, Reuters reports.
    • Rio is seeking up to $1/ton more than the index price for Pilbara's PB fines from Chinese mills on long-term contracts for 2017, in a break from a years-long trend of pricing at spot values, according to the report; Rio previously was selling the ore at a premium only to traders.
    • Rio reportedly also has pushed up the premium it seeks from traders to $2-$2.50/ton over the index price for PB fines for January to April, which would be a record high and up from a premium of $1.50 for the four-month period through this December.
    • "The steel market is so hot this year and they think it's something that buyers can accept," a source tells Reuters. "If Rio gets it, other miners may follow."
    • Related tickers include BHP, VALE.
    Nov. 29, 2016, 8:33 AM | 4 Comments
  • Nov. 28, 2016, 12:04 PM
    • Hitting fresh 52-week highs on double the normal volume today:
    • Vale (VALE +5.2%)
    • Cliff's Natural Resource (CLF -1.8%)
    • Essent Group (ESNT +1.8%)
    • Finisar (FNSR +4.7%)
    • China Lodging (HTHT +5.8%)
    • 51job (JOBS +1.4%)
    • PrivateBancorp (PVTB +0.1%)
    • Alleghany Corp. (Y -0.1%)
    • The only fresh 52-week lows today are in European telecom:
    • Vodafone (VOD -2.3%)
    • Orange (ORAN -1.4%)
    Nov. 28, 2016, 12:04 PM
  • Nov. 25, 2016, 2:32 AM
    • Another $181M has been approved by BHP Billiton (NYSE:BHP) and Vale (NYSE:VALE) in financial support for their Samarco mine disaster in Brazil.
    • The amount is part of a $1.2B provision already foreshadowed by BHP and will include credit lines of $115M each to carry out stabilization work.
    • The accident 12 months ago killed 19 people and led to the filing of charges against 21 officials and employees.
    Nov. 25, 2016, 2:32 AM