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Today, 9:17 AM
Fri, Feb. 5, 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
Thu, Feb. 4, 9:19 AM
- Gainers: VHC +89%. GLUU +21%. OCLS +18%. WFT +12%. ATNY +11%. SEDG +11%. PETX +10%. SVA +9%. ING +9%. TTWO +8%. SBH +8%. GRUB +7%. VALE +7%. HMY +7%. CDNS +6%. CDE +6%. SBGL +6%. GSH +5%. AUY +5%. VIAB +5%. RIO 5%.
- Losers: PPP -16%. KSS -15%. GPRO -15%. IMPV -13%. CS -13%. PACB -13%. RL -9%. AZN -7%.
Wed, Feb. 3, 9:19 AM
Fri, Jan. 29, 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)
Thu, Jan. 28, 5:37 PM
- Vale (NYSE:VALE) will seek board approval to potentially halt dividend payments this year, disclosing in a Brazilian regulatory filing that it wants to set a zero minimum payment for 2016 and to better align dividend policy with today’s commodities prices “uncertainty."
- VALE says it "may decide on the distribution of some remuneration to shareholders, provided that there is sufficient cash flow generation" as the year progresses and the market situation gains clarity.
- VALE +3.7% AH.
Tue, Jan. 26, 8:57 AM
- Vale (NYSE:VALE) may reopen its Tubarao iron ore and coal port, the company's lawyer says, staving off the possibility it will have to begin closing mines.
- The decision by a Brazilian judge gives Vale 60 days to explain how it would fix environmental problems at the port that led to a court-ordered shutdown last week.
- Vale had only about four days to overturn the closure, which began Thursday, or risk having to start shutting mines in the Minas Gerais state, HSBC had said.
- Tubarao is responsible for about a third of Vale's more than 300M metric tons of annual iron ore and iron ore pellet exports.
- Earlier: Vale says 200K tons/day of iron ore halted at Tubarao port (Jan. 22)
Mon, Jan. 25, 11:57 AM
- Brazilian iron ore miner Samarco, the 50-50 joint venture between Vale (VALE -1.7%) and BHP Billiton (BHP -2.7%), received serious danger warnings from ground sensors in 2014 and 2015, months before November's disastrous dam burst, according to Globo TV's Fantastico news magazine.
- The alerts from probes driven deep into the dam's structure to detect ground moisture and stability reached as high as "emergency" levels, according to the report, which cited Samarco-commissioned engineering studies provided to prosecutors investigating the case.
- The studies did not include sensor data from areas critical to the integrity of recent enlargements to the dam, an indication that the sensor data was lightly regarded, according to a prosecutor interviewed in the TV report.
Fri, Jan. 22, 4:59 PM
- Vale (NYSE:VALE) says the court-ordered closure of its Port of Tubarão in Brazil has blocked the loading of ~200K metric tons/day of iron ore as well as access to 44K metric tons/day of imported coal, which supplies much of Brazil's steel industry.
- The court also ordered the local unit of ArcelorMittal (NYSE:MT) to suspend activities at the port, saying the European steelmaker was polluting the air and water with coal ash.
- Benchmark prices for iron ore were mixed today following the court ruling, suggesting traders are betting the decision will be overturned on appeal before it affects the market.
- Separately, Moody’s earlier put Vale’s debt on review for possible downgrade, citing slack demand for prices of iron ore and other commodities because of slowing growth in China; Moody’s currently rates Vale at Baa3, the lowest of investment grades.
Fri, Jan. 22, 9:21 AM
Fri, Jan. 22, 8:28 AM
- Moody's places 120 oil and gas companies on review for a downgrade, in a sweeping global review that includes all major regions and ranges from the world's top global majors such as Royal Dutch Shell (RDS.A, RDS.B), Total (NYSE:TOT) and BP to 69 U.S. E&P and services firms.
- Warning of "a substantial risk that prices may recover much more slowly over the medium term than many companies expect, as well as a risk that prices might fall further," Moody's now sees both WTI and Brent crude averaging $33/bbl this year, a $7 cut for WTI and a $10 reduction for Brent from its previous forecast.
- The ratings firm also places 55 mining companies on review for downgrade as they battle a slump in commodity prices.
- Among the companies placed on review are Alcoa (NYSE:AA), Schlumberger (NYSE:SLB), Chesapeake Energy (NYSE:CHK), Transocean (NYSE:RIG), Statoil (NYSE:STO), Vale (NYSE:VALE), Goldcorp (NYSE:GG), National Oilwell Varco (NYSE:NOV) and Diamond Offshore (NYSE:DO).
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, PXI, FIF, PXJ, NDP, RYE, FXN, DDG
Fri, Jan. 22, 2:36 AM
- Brazil's government and Samarco Mineração, a joint venture between Vale (NYSE:VALE) and BHP Billiton (NYSE:BHP), are inching closer to a deal to settle a 20B-real ($4.8B) lawsuit related to November's deadly dam burst.
- The resulting tsunami of mud roared through river valleys in two states, killing at least 17 people and dumping mine waste as far away as the Atlantic Ocean.
- An outline of the accord between the two sides is likely to be completed by early February.
Thu, Jan. 21, 9:53 PM
- Vale (NYSE:VALE) is ordered to temporarily close its key Tubarao port after iron ore and coal dust were found in the sea.
- Iron ore futures prices in Asia surge on the news along with miners’ shares, as BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RIO) and Fortescue Metals (OTCQX:FSUMF) are all up sharply in early Australia trading.
- Steelmaker ArcelorMittal (NYSE:MT) also uses the port, although it says the court’s decision will not immediately affect its activities.
- The court ruling adds to Vale’s woes after the dam breach at its Samarco joint venture caused at least 17 deaths and led to widespread environmental damage.
Thu, Jan. 21, 7:56 AM
- Brazilian mining company Samarco says CEO Ricardo Vescovi and Director of Operations Kleber Terra have taken temporary leave from their positions, more than two months after the failure of a waste storage dam that killed 17 people.
- The two execs of the joint venture between Vale (NYSE:VALE) and BHP Billiton (NYSE:BHP) plan to focus on their defense against accusations of environmental crimes by Brazil's Federal Police; formal charges have not been filed pending a full investigation.
- Commercial Director Roberto Carvalho will serve as interim CEO while Maury Souza would step in as director of operations.
Wed, Jan. 20, 10:54 AM
- Vale (VALE -4.9%) is downgraded to Hold from Buy with a $2.20 price target, cut from $5, at HSBC, which says the company’s value is "crumbling" due to the falling iron ore and base metals prices.
- HSBC says product quality and cost resilience appear insufficient to support EBITDA, as it estimates 2016-18 iron ore prices at $39/ton, and reduces the three-year EBITDA by 33 percent to reflect the revised price forecast; however, Vale should be able to control cost, which would ease the impact of the decline in price, the firm says.
- With increasing debt appearing unavoidable, Vale is unlikely to pay dividends in 2016, the firm says.
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
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