Fri, Oct. 2, 10:59 AM
- Australia's Port Hedland, which handles ~20%h of the world's seaborne iron ore trade, reports record monthly iron ore shipments of 39.3M metric tons in September, an 8% rise from a year ago and slightly above the August level.
- Port Hedland is used by BHP Billiton (BHP +1.3%) and Fortescue Metals (OTCQX:FSUMF +6.4%); BHP plans to increase iron ore output by 6% to 247M metric tons by next July, while Fortescue is running at an annual rate of ~165M metric tons, making them the no. 3 and no. 4 worldwide producers after Vale (VALE +2.1%) and Rio Tinto (RIO +0.7%).
Wed, Sep. 30, 6:50 PM
- Vale (NYSE:VALE) says its biggest project - S11D, part of the Carajas mining complex in northern Brazil - is ahead of schedule and on track to beat a targeted December 2016 start date.
- The project is expected to add 90M metric tons of annual capacity to global supply, although the company intends to control the speed at which it hits the market, CFO Luciano Siani tells Bloomberg.
- While S11D coming on stream sooner than planned would help Vale reduce its debt, it looms as another strain on an iron ore market hit by a series of expansions by Vale and main rivals BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) in Australia at a time of slowing Chinese growth.
- Siani also says a proposed IPO of the company's base metals assets is off the table and will be resurrected only if prices recover.
Tue, Sep. 29, 8:28 AM
- BHP Billiton (NYSE:BHP) says it sees its earnings doubling over the next 15 years, even in a world where carbon emissions are cut to limit global warming to 2 degrees Celsius (or ~3.5 degrees Fahrenheit).
- Even with the 2 degrees Celsius limit that has been set for UN climate talks later this year, BHP says demand in 2030 for all its commodities except thermal coal would be higher than in 2014.
- Assuming “an orderly transition” between now and 2030 to meet a 2-degree climate target, BHP forecasts a doubling in EBITDA, only marginally below the company’s core outlook based on a 3-degree trajectory; no specific dollar figures are cited.
- “Our commodity diversification, the competitiveness of our production and the quality of our resource base minimizes the risk of stranded assets,” Chief Commercial Officer Dean Dalla Valle says.
Mon, Sep. 28, 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.
Thu, Sep. 24, 11:59 AM
- Royal Dutch Shell (RDS.A, RDS.B), BHP Billiton (NYSE:BHP) and GE are teaming up with the McKinsey consultancy and other large companies to advise governments on how to combat global warming without weakening their economies, Financial Times reports.
- The companies also are backing a $6M “energy transitions commission” to create a blueprint for a greener global economy in the next 15 years.
- But the commission, due to be formally unveiled at a conference in Texas on Monday, already is under fire from some environmental groups who ask if a body supported by fossil fuel companies can offer objective guidance on global warming.
Wed, Sep. 23, 12:57 PM
- BHP Billiton (BHP -1.6%) reveals a plan to alter its dividend funding policy to ensure a promise on payouts to its British shareholders, but the move could come at a cost to its Australian shareholders.
- Under the proposal, BHP's Australian company would effectively make payments to the British company to enable dividends to be paid, but the payment would mean BHP's Australian shareholders lose out on getting tax benefits, or franking credits, on the amount.
- BHP says it does not expect any impact on its ability to pay fully-franked dividends in future, given the $25.4B franking credits available on its books.
- The British and Australian sets of shareholders will vote on the proposal in October and November, respectively.
Wed, Sep. 23, 11:49 AM
- BHP Billiton (BHP -1.5%) CEO Andrew Mackenzie saw his total compensation fall 43% in the past fiscal year to June 30, feeling the pain from sharply lower commodity prices that sent the stock ~20% lower and underlying profits cut by 52% during the period.
- BHP says Mackenzie earned US$4.6M in cash and stock options, in addition to other benefits such as pension contributions, for the fiscal year, vs. the $8M pay package he received a year earlier, which was his first as the head of the company.
- BHP also will cut pay to its chairman by 13% and reduce fees for non-executive directors in response to the weak outlook for commodities.
Tue, Sep. 22, 11:17 AM
- As part of Macquarie's pessimistic outlook for the potash market, the firm says its base-case scenario for BHP Billiton (BHP -4.2%) assumes the indefinite deferral of the Jansen project in Canada, which already has consumed ~$3.8B in capital.
- For Jansen to proceed, prices would need to rise to at least $400/metric ton to achieve an acceptable rate of return and probably to $500 to compete for capital with the company’s other projects, Macquarie says, amid its forecast for potash prices to average just $254/metric ton next year.
- BHP, which has considered potash a potential key division for future growth, says in response to Macquarie's report that Jansen remains the world’s “best undeveloped potash resource.”
Tue, Sep. 22, 9:07 AM
- Mining shares are leading a big slide in European equities as metals prices tumble on fears that an economic slowdown in China, the world’s biggest consumer of raw materials, is deepening.
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) fell to a new intraday low of 107 pence/share, down more than 9% for the worst performance on the U.K.’s FTSE 100 index; Anglo American (OTCPK:AAUKF, OTCPK:AAUKY), ArcelorMittal (NYSE:MT) and Antofagasta (OTC:ANFGF) each fall more than 6%, while BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) rank among the 10 biggest decliners, down ~4.3% each.
- Credit Suisse cuts its earnings estimates across the mining sector, saying “Until China demand and emerging market currencies find a floor, it will remain challenging to put an absolute floor on commodity prices."
- The firm cuts its stock price targets for diversified miners including BHP, which also says it is planning to sell hybrid securities to help refinance near-term liabilities.
- Moody's says miners likely will be the hardest hit of any sector in Europe, the Middle East and Africa as a result of China’s economic slowdown.
- Also: FCX -4.5%, VALE -4.1%, X -2.8%, AA -1.7% premarket.
Fri, Sep. 18, 10:28 AM
- The head of BHP Billiton's (BHP -1.2%) coal business paints a bleak picture for the coal mining sector (NYSEARCA:KOL), saying depressed prices likely will continue to plague the industry for several more years as miners continue to produce too much supply and China’s economy slows.
- "In BHP Billiton’s coal business, we made a 3% return on capital in our Australian assets last year and that’s at the good end of the industry spectrum,” says coal president Mike Henry.
- Still, Henry says he is optimistic that the market will improve eventually, since there is no practical substitute for metallurgical coal in steelmaking, which means prospects should improve as an oversupply of steel is run down and demand grows among emerging economies.
- Henry also worries the industry is losing the public relations battle to the green lobby for the support of investors and the public, and that weaker returns driven by lower prices are reinforcing an incorrect perception that coal’s outlook is bleak.
Wed, Sep. 16, 2:55 PM
- The 40-year-old ban on U.S. crude oil exports is a relic of another time that "cuts jobs, pay and profits" around the world, BHP Billiton (BHP +3.6%) CEO Andrew Mackenzie tells business leaders at a Chamber of Commerce event in D.C. as part of a broad pitch for free trade.
- The CEO says trade restrictions such as the U.S. crude export ban and tariffs on steel are slowing global commerce, which is lagging far behind its historical pace of expansion, and would limit job growth and stifle innovation.
- Repealing the crude oil ban “would add hundreds of thousands of jobs to the U.S. economy, and research shows that prices at the pump would fall,” the CEO says, and “would show the world that the U.S. remains committed to economic freedom and the promotion of global growth.”
Mon, Sep. 14, 10:27 AM
- BHP Billiton (BHP -0.9%) is upgraded to Buy from Hold at Jefferies, which cites BHP's 7.7% dividend yield, strong free cash flow that should be sufficient to cover the dividend, its low cost assets, and its low operational and geopolitical risk.
- The firm says production cuts in response to lower iron ore prices are helping, and it expects the same for copper; the copper price outlook for the next year has improved modestly as a result, although near-term risk to copper and iron ore is still to the downside.
- Jefferies also downgrades Antofagasta (OTC:ANFGF) from Buy to Hold on valuation.
Fri, Sep. 11, 12:59 PM
- Rio Tinto (RIO +2.2%) is upgraded to Buy from Neutral at UBS, which sees improving risk/reward potential as RIO begins to show some discipline in iron ore and prices holding up surprisingly well, given demand is seasonally weaker.
- The firm says RIO offers the most attractive valuation of the Australian diversified miners, trading at 11x PE, with a forecast dividend yield of 6%; RIO also has the highest near-term growth profile, a strong management team and further restructuring potential.
- UBS maintains its Buy rating on BHP Billiton (BHP +0.3%) but switches its preference to RIO over BHP, as RIO offers a better valuation, stronger near-term volume growth, and more restructuring potential; the firm expects both stocks to maintain their dividends through the down cycle.
Thu, Sep. 3, 7:49 AM
- Rio Tinto (NYSE:RIO) says it expects worldwide demand for iron ore to keep growing despite China’s economic slowdown, sticking to a forecast for global demand to grow by 2% per year to 3B metric tons by 2030.
- No. 2 global miner Rio reaffirms its outlook that Chinese crude steel output will reach ~1M metric tons by 2030, a more optimistic view than BHP Billiton's (NYSE:BHP) forecast for production to peak in the mid-2020s at 935M-985M tons.
- The outlook signals that Rio will continue to boost iron ore production, although it has yet to give construction approval for its new Silvergrass mine in Australia, which has been deferred three times in the past two years and estimated to cost $1B to develop.
- RIO +1% premarket.
Tue, Sep. 1, 12:19 PM
- Freeport McMoRan (FCX -7.4%) is downgraded to Neutral from Buy with an $12 price target, lowered from $20, at Citigroup, which says the copper sector has not reduced production enough to account for falling prices.
- FCX has guided to strong cash flow of $6.3B for 2016, at $2.25/lb. copper and $54/bbl oil, but the guidance included considerable working capital drawdown, which Citi estimates at $1.8B while saying there is "very little incremental deleveraging opportunity."
- According to the Citi report, the best opportunity for FCX to improve its free cash flow is to eliminate or at least reduce its exposure to oil and gas.
- Global miners are having a rough time as weak China data batters stocks: BHP -6.7%, RIO -5.3%, VALE -3.5%, TCK -7.6%.
Tue, Sep. 1, 9:13 AM
BHP vs. ETF Alternatives
BHP Billiton Ltd is a natural resources company. The Company is engaged in the producing commodities, including iron ore, metallurgical and energy coal, conventional and unconventional oil and gas, copper, aluminium, manganese, uranium, nickel and silver.
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