Wed, Jan. 14, 9:17 AM
Dec. 31, 2014, 7:35 AM
- "The major factor that undercut ore prices in 2014 was the Australian-led supply surge," says Morgan Stanley's Tom Price. "In terms of price downside, the worst is probably over."
- A late-year rally has prices down "only" about 50% for the year.
- The bear market occurred as low-cost supplies from the like of BHP Billiton (BHP, BBL) and Rio Tinto (NYSE:RIO) came online just as demand from China began to cool, and the market shifted to surplus in the middle of the year. Goldman Sachs sees the excess widening to roughly 300M tons by 2017 as past investments from the miners continue to lift supplies.
- Behind Morgan Stanley's quasi-bullishness is the idea of the price decline pushing high-cost producers to the sideline, a thought echoed by VALE CEO Murilo Ferreira last month.
Nov. 21, 2014, 9:13 AM
Nov. 5, 2014, 2:01 AM
- BHP Billiton (NYSE:BHP) is planning to export ultralight oil from the U.S. without getting formal approval from Washington, testing the waters of exporting the minimally processed oil without a permit.
- People in the industry say the U.S. Commerce Department, which oversees oil exports, has been encouraging companies to pursue independent exports without having to issue new rulings permitting it, a process being called "self-classification."
- Pioneer Natural Resources and Enterprise Products Partners surprised oil markets earlier this year when they said they had obtained government approval to export the ultralight oil, known as condensate.
- BHP Billiton says it has already signed an agreement to sell a 650K barrel cargo to Swiss trader Vitol.
Aug. 19, 2014, 9:15 AM
Aug. 19, 2014, 7:14 AM
- After announcing the creation of its new global metals and mining company, BHP Billiton (NYSE:BHP) says it is now in talks with potential buyers for all, or part, of its Nickel West division in Australia, which was excluded from the company's major restructuring.
- "We continue to talk to interested parties," says CEO Andrew Mackenzie. "This is a matter of commercial discussions with several potential buyers."
Aug. 19, 2014, 3:40 AM
- BHP Billiton (NYSE:BHP) has announced its plans to form a new global metals and mining company based around its aluminium, coal, manganese, nickel and silver assets. The new company will be listed on the Australian stock exchange, with a secondary listing in South Africa.
- "With a simpler portfolio, we are targeting sustainable, productivity-led gains of at least $3.5B per annum by the end of the 2017 financial year," says CEO Andrew Mackenzie.
- The demerger will leave BHP Billiton focused on its long-life iron ore, copper, coal, petroleum and potash basins.
Sep. 28, 2013, 9:00 AM
- Deep-value investor Daniel Khoshaba's KSA Capital Partners (now renamed KSA MidOcean) has delivered an annual return of 10.1% after fees since inception in 2004 - trouncing its competition and the S&P 500. He walked between raindrops in 2008, gaining 3.6% while the S&P lost 37%, but just 27% long exposure to the market this year has the fund lagging by nearly 5%. Three current favorites are Owens-Illinois (OI), Dana Holding (DAN), and Pinnacle Entertainment (PNK).
- The world's largest maker of glass containers, Owens is in the sweet spot of being able to raise prices. With the extra cash, it's paying down debt and eventually will begin buying back stock.
- Despite nearly doubling in the past 2 years, auto-parts maker Dana still trades at just 4x free cash flow and far below Khoshaba's price target of $38. The company recently announced plans to buy back about 30% of its stock.
- A newish holding, Pinnacle was added to the portfolio after agreeing to buy rival casino Ameristar. The cost savings should allow Pinnacle to generate a 15% free-cash-flow yield in 2014 - well above Khoshaba's threshold of 10%. His price target is $40.
- While not disclosing whether he's covered successful shorts in Timken (TKR) and Caterpillar (CAT), Khoshaba recently told investors recovery is unlikely for the companies because they depend on commodities where "production far outstrips demand." He's short BHP Billiton (BHP, BBL) for similar reasons.
Sep. 8, 2013, 10:14 PM
- The ASX 200 (EWA) gains 0.3% and the aussie (FXA) is little-changed following the booting of the Labor party from power.
- A check of the miners amid new PM Tony Abbot's promise to repeal an unpopular carbon tax finds Rio Tinto (RIO) ahead by 0.35% and BHP Billiton (BHP, BBL) +1% in Sydney action.
- ETFs: EWAS, KROO, AUSE, FAUS, AUD, AUNZ, GDAY, CROC
Jul. 1, 2013, 3:25 PMThe cash squeeze in China was instigated in Beijing by a central bank grasping for some way to slow out-of-control credit growth, reports the WSJ, citing internal bank documents. With the panic subsided (for the moment), the finger-pointing begins, taking away from the question of what to do about what even Beijing leadership sees is a massive credit bubble. FXI continues near a 52-week low, and so do assets like the Aussie dollar (FXA), and miners VALE, RIO, and BHP Billiton (BHP, BBL). | Comment!
Mar. 19, 2013, 7:33 AMRio Tinto (RIO) is downgraded to Conviction Sell at Goldman, which notes the company's overwhelming dependence on iron ore prices. "We see minimal free cash flow and significant earnings declines if the company goes ahead with the Pilbara 360 project in a declining iron ore price environment." Shares -3.2% premarket. BHP -1.8%. Earlier: Goldman cuts its iron ore price forecast. | 7 Comments
Jan. 11, 2013, 7:43 AM
Dec. 27, 2012, 7:31 AM
Oct. 9, 2012, 8:39 PMBHP Billiton returns to the Australian bond market for the first time in 11 years, selling $1.02B in 5-year notes. Unconcerned with the reversal in Oz's mining boom, investors bid for about twice the amount of paper offered, and the issue was priced at a lower yield than what higher-rated Aussie banks must pay. | Comment!
Sep. 27, 2012, 3:48 PMSpeaking of the cure for low prices, it's estimated 40% of China's iron ore mines have suspended operations as the mineral's low price has them losing money. Good enough, but the pain is apparently not yet great enough for VALE which says it will continue forging ahead to increase ore output. Earlier: Baosteel shutters a steel plant. | 4 Comments
Sep. 4, 2012, 7:33 AMAustralia's Fortescue joins rivals BHP and RIO in announcing slashed capital spending plans amidst sliding demand and pricing for iron ore. The move comes just days after the company's CEO said all was well in the business and the company expected to triple production within a year. Shares fell 4.2% in Sydney. | 1 Comment
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