Tue, Aug. 11, 11:35 AM
- Commodity metals are getting hammered by China's devaluation, with aluminum trading down nearly 2%, copper prices lower by 2.5% and nickel plunging more than 3.5%.
- Hardest hit of the mining stocks is Freeport McMoRan (FCX -14.1%), which has completely surrendered yesterday's 10.8% surge; shares now are down 72% over the past year and 57% YTD.
- Iron ore miners are sharply lower: BHP -5.5%, RIO -4.2%, VALE -7.8%, CLF -7.3%.
- Steel companies: X -9.7%, MT -5.1%, AKS -5.7%, NUE -2.9%, STLD -3.5%, CMC -4%.
- Also: AA -6%, CENX -4.9%, TCK -8.2%, SCCO -4.9%.
- ETFs: XLB, JJC, XME, SLX, PEO, VAW, COPX, DBB, UYM, CU, IYM, JJN, SMN, JJU, PICK, MATL, CPER, JJT, BOM, RJZ, FXZ, PYZ, BOS, FOIL, JJM, LD, BDD
Fri, Jul. 24, 3:29 AM
- Gold continued its slide on Friday, on course for its biggest weekly loss in nine months, as a breach of key support levels pushed more sellers to cut their exposure.
- Spot gold fell as much as 1.2% to $1,077 an ounce, bringing its losses this week to more than 4%.
- Copper is also feeling the burn amid a rout in commodities and mining stocks. The red metal extended its slide to the lowest price since 2009, heading for a 4.6% drop this week.
- ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GTU, GLL, JJC, UGLD, DZZ, GLDI, COPX, OUNZ, CU, DGL, DGZ, DGLD, AGOL, GEUR, CPER, UBG, GYEN, CUPM, QGLDX
Fri, Jun. 5, 12:41 PM
- The overall market capitalization of the world's 40 biggest miners has been cut in half over four years, sinking 16% Y/Y to $791B at the end of 2014, according to the latest annual survey by accounting firm PricewaterhouseCoopers.
- PwC said the top 40 miners' return on capital employed fell to its lowest level since at least 2005, and few companies, including Randgold Resources (NASDAQ:GOLD) and Norlisk Nickel (OTCPK:NILSY), topped 15%.
- The top 40's dividend coverage was just 1.1x, a practice PwC says "isn’t sustainable in the long term... dividends paid in 2014 consumed all available cash, reducing the balance sheet flexibility of miners."
- The consequence of the payouts and the falling market cap is that miners’ dividend yield rose to 5%, the highest in a decade.
- ETFs: GDX, NUGT, GGN, DUST, SIL, GLDX, XME, COPX, SGDM, BCX, ASA, SLVP, CU, RING, HAP, IRV, PSAU, MXI, GNR, TGLDX, PICK
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
Dec. 15, 2014, 1:55 AM
- Rio Tinto (NYSE:RIO) and BHP Billiton (NYSE:BHP) are looking to replicate their iron ore strategy in the copper business, squeezing out high-cost producers by injecting more of the red metal into an oversupplied market.
- Separately and in joint ventures, Rio and BHP intend to mine millions of additional tonnes of copper, confident in the coming years that copper will be in short supply.
- Copper producers: OTCPK:GLNCY, FCX, TCK, SCCO
- ETFs: JJC, COPX, CU, CPER, CUPM
Aug. 11, 2014, 6:58 AM
- Indonesian officials say there are no plans to withdraw the seven-month old ban on exports of unprocessed nickel ore and bauxite.
- The country was the world's top exporter of nickel ore and a major bauxite producer until this past January, when the ban was issued in order to force miners to build smelters.
- Last month, the government allowed several firms producing partially processed minerals such as copper concentrate to resume exports, although Indonesia's chief economic minister Chairul Tanjung says the same rationale does not apply to unprocessed exports of nickel ore and bauxite.
- "Nickel is different because if you are smelting in Indonesia the added value is much higher than copper," says Tanjung. "Because of that it's a separate issue."
- ETFs: IDX, JJC, EIDO, COPX, CU, IDXJ, JJN, CPER, NINI, CUPM
Mar. 12, 2014, 6:56 PM
- While steep drops in copper, iron ore and coking coal prices have spooked investors, KGHM chief Derek White says there's no need for mining executives to panic - at least not yet.
- There's no real threat to copper mining operations at a long-term copper price ~$3/lb., White says, but that could change if the price drops below $2.50 for a prolonged period.
- Iron ore prices have performed better than expected in recent years, and this week’s drop brings them closer to many forecasts; analysts believe most iron ore projects are fine at a long-term price above $100/metric ton.
- Coking coal's current $110/metric ton is still not low enough to disrupt most operations, with some exceptions; TD Securities expects Teck Resources (TCK) to defer its Quintette project in British Columbia until the market recovers.
- ETFs: XME, COPX, CU, JUNR, PICK, JJC, DBB, CPER, RJZ, BOM, BOS, JJM, BDD, CUPM, RGRI, UBM, BDG, USMI, HEVY
Mar. 11, 2014, 12:02 PM
- A continued wave of morning selling has brought copper lower by 4.3% on the session to $2.95 per pound, the weakest level since the summer of 2010.
- Copper started the year at $3.40 and its swift decline this week comes amid horrid Chinese export numbers, a plunging price of iron ore, and chatter about defaults and banks calling in loans in China.
- JJC -3.1%
- Other copper ETFs: CPER, CUPM
- Copper producer ETFs: COPX, CU
Sep. 27, 2013, 2:29 PM
- Solar ETFs lead in 2013 returns after years of losses, with water funds also bringing in strong returns for investors
- Metals and miners bring up the rear, both bleeding funds while the overall health of the U.S. economy continues to recover.
Jun. 24, 2013, 5:31 AM
Jun. 4, 2013, 2:28 PMCopper rallies (JJC +1%) on expectations of tighter supplies, as the potential rises for an extended shutdown at Freeport McMoRan's (FCX -2.5%) Grasberg copper and gold mining operation in Indonesia. If FCX were to declare force majeure, the shutdown could remove 100K-150K metric tons of copper supply from the market, a sizable chunk out of estimates of 600K-800K metric tons. | Jun. 4, 2013, 2:28 PM | Comment!
Apr. 22, 2013, 1:52 PMGoldman Sachs cuts its forecast for copper prices this year, citing rising global stocks and mounting worries regarding China's growth outlook, but says the selloff in Freeport McMoRan (FCX -0.4%) looks overdone. The firm maintains its Buy rating for FCX but lowers its 2013 and 2014 EPS estimates to $3.35 from $4.53 and to $3 from $3.20, respectively. | Apr. 22, 2013, 1:52 PM | Comment!
Apr. 22, 2013, 7:11 AMGoldman gets bullish on copper albeit at a lower price point. After a 13% YTD decline the selloff is "overdone," according to the investment bank which cut its three-, six-, and 12-month estimates to $7,500, $8,000, and $7,000 per metric ton respectively. Although some demand concerns are warranted given the cooling of China's economy, "underlying cyclical growth is likely stronger than the headline figures suggest." (Previously: a bear market in copper) | Apr. 22, 2013, 7:11 AM | 1 Comment
Apr. 20, 2013, 8:25 AMDr. Copper's diagnosis for the world economy: It isn't well. Copper ended the week wallowing in bear market territory after top copper consumer China reported slower-than-expected economic growth. At this point, weak demand and robust supplies could continue to put pressure on copper prices, or heavy short selling may dry up and spur a strong rebound. | Apr. 20, 2013, 8:25 AM | 4 Comments
Mar. 25, 2013, 10:42 AMHedge funds are the most bearish ever on copper as global inventories expand to a nine-year high; speculators raised net short positions in U.S. copper futures and options by 53% to nearly 26K contracts in last week. “We’re sitting on unprecedented stockpiles," BMO's Jack Albin says. “Demand has been pretty tepid... In the global economy, we’re seeing improving growth, but it’s still at a slow rate." | Mar. 25, 2013, 10:42 AM | Comment!
Mar. 18, 2013, 5:48 PMCopper prices hit a new 2013 low today, tumbling 2.6% as "the Cyprus news highlights what many investors would like to forget: that the region’s debt problems are ongoing... and that a solution continues to be elusive." This adds to continued China worries, as "more and more copper is piling up in warehouses." Unlike in the stock market, the slightest bit of bad news is enough to weigh on copper. | Mar. 18, 2013, 5:48 PM | Comment!
CU vs. ETF Alternatives
The First Trust ISE Global Copper Index Fund is an exchange-trade fund. The investment objective of the Fund is to seek investment results that correspond generally to the price and yield, before the Fund's fees and expenses, of an equity index called the ISE Global CopperTM Index.
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