Fri, Dec. 9, 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.
Thu, Dec. 1, 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%
Wed, Nov. 30, 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.
Tue, Nov. 29, 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.
Tue, Nov. 29, 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.
Mon, Nov. 28, 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%)
Fri, Nov. 25, 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.
Tue, Nov. 22, 6:33 PM
- Samarco’s quest to obtain permits for resuming its Brazilian iron ore operations is making progress despite environmental fines and a court order, with a mid-2017 restart still possible, the Minas Gerais state environmental regulator says.
- The venture owned by BHP Billiton (NYSE:BHP) and Vale (NYSE:VALE), which halted work a year ago after a tailings dam collapse, is seeking a new operating license and additional permits to deposit waste into an unused pit rather than building a new dam; the regulator says it has received all documentation from Samarco and is analyzing the plan to use the vacant pit while it formulates guidelines for the mining complex license.
- Samarco also needs to also prove it has contained the leaking of mining waste before it can secure licenses, but the regulator says the issue is not slowing the process.
Tue, Nov. 22, 3:45 PM
- U.S. Steel (X +11.4%), AK Steel (AKS +10.7%), Steel Dynamics (STLD +4.1%), Nucor (NUE +4.4%) and Commercial Metals (CMC +4.7%) all surge to 52-week highs, extending their Trump-fueled rally as trade protectionist talk suggests that higher than usual premiums can be achieved for steel mills.
- BofA Merrill Lynch raises its 2017 average price estimate for U.S. hot-rolled coil to $650/short ton vs. its prior view of $535, as rising global prices and more protectionism should fuel strong steel prices into 2017 (SLX +5.8%).
- Bloomberg reports BofA boosted its stock price targets for Buy-rated AKS to $12 from $7, STLD to $37 from $30, CMC to $24 from $20, NUE to $65 from $57, and Allegheny Tech (ATI +7.5%) to $20 from $19; the firm remains Neutral on X and Reliant Steel (RS +6.1%).
- Also sharply higher today: MT +8.3%, CLF +13.8%, WOR +5.3%, RIO +4.1%, BHP +5.2%, VALE +7.8%.
Tue, Nov. 22, 9:17 AM
Tue, Nov. 22, 8:20 AM
- Vale (NYSE:VALE) +7.2% premarket following news that Indonesia will cut the royalty charged on sales of processed and refined nickel to 2% from 4%, a step the government hopes will encourage more miners to develop smelters.
- The reduction in royalties is seen as welcome news to investors in Indonesia's budding smelter industry, such as Vale, the country's top nickel producer.
- Royalties for other metals also would change under the new rules, according to a mining ministry official, but it is not known when the regulations actually will be released.
Fri, Nov. 18, 4:47 PM
- Cemig (NYSE:CIG) has decided to sell its minority stake in its Brazilian power generation joint venture with Vale (NYSE:VALE), in a deal that could fetch ~2B reais ($590M), Reuters reports.
- CIG reportedly would dispose of its 45% stake, but Vale wants to remain in the venture since it allows the company to avoid paying higher energy costs; companies that generate energy and use it for production are exempt from certain taxes in Brazil.
- CIG, controlled by the cash-strapped Brazilian state of Minas Gerais, has been hurt by tepid power consumption amid the country's deep recession and years of rampant borrowing.
Fri, Nov. 18, 3:56 PM
- A federal judge in Brazil has agreed to hear a criminal case against four companies and 22 employees in connection with last year's deadly tailings disaster burst at the Samarco mine.
- Prosecutors last month filed charges against the suspects, who included current and former executives of Vale (VALE -0.8%) and BHP Billiton (BHP -1.2%), and their Samarco joint venture.
- Under Brazil’s legal system, a judge must accept the charges in order for the accused to officially become defendants; they now have 30 days to present a defense, at which point they likely will stand trial.
- Vale and BHP say they “repudiate” the charges and will support the defense of the individuals indicted.
Fri, Nov. 18, 2:55 PM
- Brazil’s government has decided to push for replacing Vale (VALE -0.6%) Murilo Ferreira CEO when the current contract expires in April, Bloomberg reports.
- Brazil Pres. Temer succumbed to months of lobbying from members of his political party to seek a replacement for Ferreira, who was appointed when his predecessor was in power, according to the report.
- The government reportedly will try to work with private sector shareholders including Banco Bradesco and Mitsui to select a new CEO with a strong market background, but some analysts warn that Ferreira's departure would be unwelcome news for investors.
Wed, Nov. 16, 10:56 AM
- Global copper markets will be oversupplied for at least two years, according to executives at some of the world's top copper producers, casting doubt on the chances of a prolonged rally in prices.
- The cautious outlook comes after benchmark copper prices last week recorded their biggest weekly gain since 2011, largely fueled by Pres.-elect Trump's promises of infrastructure spending.
- "In 2017, it will still be a relatively oversupplied market. In 2018 it will not be better than 2017," says a VP at Jiangxi Copper, China's largest copper producer; he also describes the market's recent moves as "irrational."
- The founder and president of Maike Metals Group, one of China's top metals traders, says China's government needs to control "overspeculation" in the local futures market, hit by volatile trading over the last week as it was whipsawed by speculative cash.
- Relevant tickers include FCX, BHP, RIO, VALE, OTCPK:GLCNF, OTCPK:GLNCY, OTC:ANFGF, OTCPK:AAUKF, OTCPK:AAUKY, JJC, CPER, CUPM.
Tue, Nov. 15, 5:21 PM
- BHP Billiton (NYSE:BHP) is pushing to restructure debt at its Samarco venture, while joint owner Vale (NYSE:VALE) prefers a grace period on payments until it secures licenses to resume mining, Bloomberg reports.
- While BHP and Vale have said they do not intend to cover Samarco’s $3B-plus debt, they disagree over how to approach banks and bondholders after a year-long production halt in output, according to the report, which notes that BHP’s preference for restructuring would mean a haircut for creditors.
- Before the Samarco dam failure, the venture was the world’s second largest producer of iron ore pellets and generated more than 2B reais ($580M) in annual profit for its owners.