Fri, Feb. 13, 7:59 AM
- BHP Billiton (NYSE:BHP) says copper production from its Olympic Dam mine in Australia will be cut by 60K-70K metric tons this year, or more than a third of targeted output levels, due to repair and maintenance work.
- BHP says the Svedala mill, one of three at Olympic Dam, will be out of action for roughly six months after damage from an electrical failure in the milling process was found on Jan. 28; full production was expected to resume by the end of September.
- In January, BHP said it expects Olympic Dam to yield ~180K tons of copper in FY 2015, with maintenance work scheduled for September.
- The hit to copper production represents up to 3.9% of current guidance for the metal in BHP's financial year through June, with corresponding reduction in the production of gold and uranium at the mine.
Wed, Feb. 11, 2:38 PM
- Iron ore miners in the next few months will have the opportunity to bid for the northern half of the Simandou deposit, one of the world's most sought-after iron ore deposits, Guinea's mining minster tells WSJ.
- The official claims he is not concerned that weak iron ore prices will affect the bidding for the assets, saying it could be at least five years until the mines actually begin producing.
- The Simandou deposits are at the heart of an international legal dispute: Guinea last year stripped the rights to mine the deposit from Vale (NYSE:VALE) and the mining arm of Israeli tycoon Beny Steinmetz’s conglomerate, with the government alleging that the rights were obtained through corrupt practices.
- The blocks once were controlled by Rio Tinto (NYSE:RIO), but a previous government in Guinea revoked its rights to mine them; Rio is still helping to develop the southern part of the concession.
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) CEO Ivan Glasenberg has criticized the over-production of iron ore, but the company has held discussions with Guinean officials about mining rights in Simandou.
Mon, Feb. 9, 5:58 PM
- Some oilfield operators have consistently shown an ability to increase production per well, so the decrease in rig count does not proportionally correlate to a change in production, says NavPort's Eric Foster, who has collated oil well and rig data.
- In a case study focusing on horizontal shale wells in the Eagle Ford basin in Texas, NavPort found that Pioneer Natural Resources (NYSE:PXD) was easily the most efficient fracker last year, with average boe per well during the first 180 days of production of ~142K barrels; ConocoPhillips (NYSE:COP) and Marathon Oil (NYSE:MRO) were the other two companies with 100K-plus boe/well.
- Murphy Oil (NYSE:MUR) showed the greatest efficiency improvement during 2014 among the top 10 Eagle Ford basin oil producers; the only producers in the top 10 showing declines in production per well were BHP Billiton (NYSE:BHP) and Rosetta Resources (NASDAQ:ROSE).
Tue, Feb. 3, 10:24 AM
- Copper prices are on track for their biggest gains since September on speculation that China would use stimulus measures to jump-start its economy and boost demand for the metal.
- Rising oil prices and Chinese stimulus speculation “have changed the focus to the upside and the short-covering has done the rest,” says Saxo Bank's Ole Hansen, adding that “energy is such a big and important part of the commodity sector, and the somewhat improved sentiment there also helps other” raw materials; aluminum and nickel also are rising to multi-week highs.
- "We’re in this perverse world where bad news is good news,” says BNP Paribas analyst Stephen Briggs, and "a lot of people are thinking China’s going to join the rest of the world and lower interest rates or [offer] some kind of monetary response."
- Raw materials companies are off to a strong start today: FCX +5.8%, BHP +3.9%, RIO +2.4%, VALE +3.9%, SCCO +3.4%.
- ETFs: JJC, DBB, JJN, JJU, JJT, CPER, BOM, RJZ, BOS, LD, BDD, JJM, FOIL, NINI, CUPM
Fri, Jan. 30, 7:43 AM
- BHP Billiton (NYSE:BHP) says it plans to trim its workforce at the Olympic Dam copper and uranium mine in southern Australia in an attempt to reduce operating costs amid softer commodity prices.
- A leading area politician reportedly says 300 workers would be cut.
- BHP says it cannot provide a net figure for exactly how the changes would affect its total head count at the mine, which employs ~4,300 people, until later in the year; BHP has planned to increase copper output from the mine in the second half of the year.
Tue, Jan. 27, 11:47 AM
- U.S. exports of condensate have been given an important boost by Enterprise Products Partners (NYSE:EPD) agreements for contracts with at least two major trading companies to sell the light crude, according to a Reuters report.
- EPD has contracts with Mitsubishi's Petro-Diamond Singapore oil trading arm and independent oil trader Vitol for 1.2M bbl/month of U.S. condensate in 2015, trade sources say, which should give it a head start before other companies win approval to export condensate produced from shale operations.
- Royal Dutch Shell (RDS.A, RDS.B) also has approvals to export U.S. light crudes, while ConocoPhillips (NYSE:COP) is seeking a license and BHP Billiton (NYSE:BHP) also has sold at least two cargoes.
Mon, Jan. 26, 8:31 AM
- Iron ore prices extend their retreat to the lowest levels in more than five years, due to slower demand growth for steel in China as the largest mining companies add to supply.
- Ore with 62% content delivered to Qingdao, China, fell 4.3% to $63.54/dry metric ton, the lowest price since May 2009, and extends its 11% YTD decline.
- Goldman Sachs last week joined other global banks in cutting price forecasts for 2015, predicting a return to a bull market is probably more than a decade away.
- VALE -2.5%, BHP -0.5%, RIO +0.4% premarket.
Fri, Jan. 23, 11:18 AM
- Iron ore miners are broadly lower after Goldman Sachs becomes the latest global bank to deliver a dismal outlook for the steel-making ingredient, forecasting an average price of $66/metric ton this year from an earlier estimate of $80.
- Goldman is at least the fifth bank this month to lower estimates, citing rising seaborne supplies and weaker demand growth from China; just last week, Citigroup cut its iron ore forecast to $58 in 2015, down from its earlier $65, and UBS lowered its target to $66 from $85.
- Low-cost expansions likely will continue as major producers are still mining iron ore at a profit, which would expand the global seaborne surplus from 47M tons this year to 260M tons by 2018, Goldman says.
- Iron ore miners: VALE -8%, BHP -3%, RIO -3.6%, CLF -7.6%.
- Copper miners: FCX -2.6%, SCCO -2.4%, TCK -2.6%.
- Steel companies: X -6.3%, MT -7.1%, AKS -3.2%, NUE -1.2%, STLD -3%, CMC -3.8%, TMST -2.4%.
- Earlier: Goldman gives in on mined commodities
Wed, Jan. 21, 12:29 PM
- BHP Billiton's (NYSE:BHP) planned South32 spinoff may appeal to Glencore (OTCPK:GLCNF, OTCPK:GLNCY), Bloomberg speculates, because the newly formed company is taking shape near the bottom of the commodity cycle and it produces many of the same metals, including silver, manganese, aluminum.
- Glencore CEO Ivan Glasenberg is looking for undervalued acquisition targets, and his record as a relentless acquirer of assets makes him a potential buyer of South32, according to the report.
- Glencore’s market value has fallen more than 25% amid falling prices for metals and minerals, curbing Glasenberg’s prospects of a renewed deal with Rio Tinto, which some analysts say may make the cheaper South32 a more realistic option.
Tue, Jan. 20, 7:23 PM
- BHP Billiton (NYSE:BHP) says it will shut down 40% of its U.S. shale oil rigs by the end of its fiscal year.
- BHP plans to pare the number of rigs it is using in the U.S. to 16 from 26, focusing on drilling in the liquids-rich Black Hawk basin while cutting back in the Permian and Hawkville acreage; it says it will provide more details on its revised shale drilling budget, originally set at $4B for this financial year, next month.
- Also, BHP says its iron ore output climbed 16% to 56.35M metric tons in the December quarter, and reaffirmed it would boost annual output by 11% in the fiscal year to June 2015 to 225M metric tons; petroleum production for the quarter rose 10% Y/Y to 63.6M boe.
- Earlier: BHP seen slashing U.S. shale spending to shore up dividend promise
Tue, Jan. 20, 3:39 PM
- BHP Billiton (BHP -0.9%), which has cut capital spending for the past two years, may need to cut its planned $4B spending this year on U.S. shale wells and book writedowns on its shale assets to have enough cash to meet a promise not to reduce its dividend, analysts and investors say.
- U.S. onshore drilling is the biggest single item in BHP's planned $14.2B capital budget and would be the easiest target, but longer-dated projects such as the Jansen potash project in Canada and the Olympic Dam copper expansion study in Australia also could be vulnerable
- "There's severe pressure for them to cut capex on the onshore business. Once they come clean with that, the market will be in a better position to assess its value," says CIMB analyst Michael Evans, who thinks BHP could its shale spending in half to $2B.
- The spending cuts could come as soon as Wednesday, when BHP will release its December quarter operational review.
Wed, Jan. 14, 12:39 PM
- Citi cuts price targets for iron ore to $58 for 2015 and $62 for 2016, down from its prior estimates of $65 for both years, and lowers its outlook for thermal and met coal.
- Citi warns its downwardly revised forecast means it now expects earnings for major mining companies will fall by 9%-21% for 2015 and by 3%-16% in 2016.
- Rio Tinto (RIO -2.5%) is the exception, as Citi sees earnings rising 7.1% this year and 10.6% next year due to the company’s greater exposure to the weaker Australian dollar.
- The firm cuts its price target for Glencore (OTCPK:GLCNF -7.2%) by 8% to £3.60 from £3.90 and sees earnings falling 21% and 16% respectively in 2015 and 2016.
- Citi says it is still bullish on the sector, but warns that metals and mining companies will only slowly grind higher over the next few years.
- Also: BHP -4.5%, VALE -5%, FCX -12%, SCCO -4.9%, TCK -9.7%, CLF -4.4%, CENX -9.1%, MT -4.2%, X -4.9%, NUE -3.4%, STLD -2.6%, BTU -9.8%, ANR -8.8%, ACI -8.9%.
Wed, Jan. 14, 10:28 AM
- Freeport McMoRan (FCX -10.8%) sinks to a 52-week low as copper prices fall 4.5% to collapse to 2009 levels, though it is off overnight lows after prices were down nearly 9% at one point in London.
- Other big global miners also are sharply lower: SCCO -7.3%, RIO -2.5%, BHP -4.4%, VALE -3.8%, CLF -5.8%.
- Concerns over a supply glut and slowing consumption in China have weighed on copper prices in recent months; copper is often seen as an omen for the global economy because it is used in a wide array of construction and manufacturing activities, so today's precipitous drop explains much of the weakness in global equity markets.
- The iPath Dow Jones UBS Copper Subindex Total Return ETN (NYSEARCA:JJC) is trading so heavily that nearly 60% of the average full-day volume traded in the first 10 minutes this morning.
- ETFs: CPER, CUPM, DBB, BOM, RJZ, BOS, BDD, JJM, RGRI, UBM, BDG, USMI, HEVY
Wed, Jan. 14, 7:57 AM
- Mining stocks look headed for sizable losses, as copper prices sink to five-and-a-half year lows and the World Bank lowers its forecast for global economic growth.
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) -11.5% in London trading, Antofagasta (OTC:ANFGF) -7% in London, Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) -9.5% in London, Vedanta (OTCPK:VDNRF) -18% in London, Rio Tinto (NYSE:RIO) -4.3% premarket in the U.S., VALE -2.9%, FCX -5.1%, CLF -2.6%.
- BHP Billiton (NYSE:BHP) -7.5% in London and -5.5% U.S. premarket after S&P Capital IQ downgraded shares to Hold from Buy, expecting "weaker commodity prices to increasingly impact on group profits as hedges expire and see currency headwinds from a stronger [U.S. dollar]."
- ETFs: XLB, XME, SLX, COPX, VAW, UYM, CU, IYM, HAP, IRV, MXI, SMN, GNR, GUNR, PICK, MATL, FXZ, PYZ, CRBQ, RTM, CCXE, FMAT, GRES, SBM
Tue, Jan. 13, 6:55 PM
- MarketWatch's Philip Van Doorn spotlights U.S. drillers and oilfield services companies with efficiency advantages that could help them weather the bear market in crude oil.
- A key step in the fracking process to extract oil from shale is pumping proppant into a well to open cracks from which oil and gas can flow, but the cost of proppant varies widely; companies with the lowest proppant cost will have the best shot of turning a profit from shale extraction operations during a prolonged period of low oil prices, Van Doorn writes.
- The Rockies formation is considered the most efficient, with a proppant cost of $8.88/bbl during the first 90 days of production; 54% of WPX Energy’s (NYSE:WPX) non-conventional oil wells are in the Rockies.
- 83% of Noble Energy’s (NYSE:NBL) non-conventional wells are located in the Niobrara formation, which has a low proppant cost of $15.41/bbl.
- Overall, Hess (NYSE:HES) is calculated to boast the best proppant efficiency, with an average cost of $3.58/bbl for the first 90 days of production, followed by BHP Billiton (NYSE:BHP) with an average cost or $9.14, and Whiting Petroleum (NYSE:WLL) with an average proppant cost of $11.08/bbl.
Mon, Jan. 12, 2:56 PM
- Apache (NYSE:APA) appears to have gone cold on the $3B sale of its remaining West Australian gas and oil assets as oil prices plunge and potential buyers struggle, The Australian reports.
- Sales talks with potential buyers are said to have been held up in the wake of sliding prices and high Western Australia gas prices amid falling international oil prices and U.S. gas prices that could make a deal look less appealing.
- At the same time, last month’s $2.75B sale of its Wheatstone LNG stake in Australia and in the yet-to-be approved Kitimat venture in British Columbia may have eased the pressure from activist shareholders who were pushing APA to focus on the U.S.
- Among potential buyers, Santos (OTCPK:STOSF) is APA’s partner in some Australian fields but is now in conservation mode following the oil price slide, Origin Energy (OTC:OGFGF) is facing a downgrade of its credit rating if oil prices fall and will not want to weaken its balance sheet, and even BHP - APA’s partner in the Macedon gas plant - is facing challenges maintaining its A-grade credit rating.
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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