Yesterday, 5:19 PM
- Silver Wheaton (NYSE:SLW) -3% AH after agreeing to sell ~$800M of stock to fund its purchase of an additional supply of gold from a Vale's (NYSE:VALE) Salobo mine in Brazil.
- SLW says it will use the proceeds of the offering to fund its acquisition of an additional 25% gold stream from the mine, which is in addition to the 25% of the mine's gold production SLW acquired in 2013.
- The deal raises SLW’s production and cash flow profile by adding expected average gold production of 70K oz./year for the first 10 years and 60K oz./year over the first 30 years.
Thu, Feb. 26, 8:59 AM
- Vale (NYSE:VALE) -2.6% premarket after posting below consensus Q4 earnings, as iron ore prices fell by nearly half and the Brazilian currency weakened vs. the dollar.
- Vale reported a Q4 loss of $1.85B, far worse than analyst expectations for a $740M loss, which impacted lower than expected FY 2014 net income of $657M; Vale wrote off almost $2B in fertilizer, iron ore, coal and nickel assets during the quarter, including a $1.05B charge on the fertilizer business in Brazil.
- Q4 EBITDA tumbled by two-thirds to $2.19B and fell 41% for the full year to $13.35B, the lowest figure since the 2009 global recession.
- Strength in Vale's base metals division helped to cushion the fall in iron ore prices, with EBITDA up 54% to $2.52B; Vale became the world's largest producer of nickel in 2014.
- Because cash generation has not been enough to cover Vale's $4.2B in dividend payments and $11.98B in capital spending, the company has been seeking to cut costs, find partners and sell assets, which CFO Luciano Siani says will intensify moving forward.
Thu, Feb. 26, 6:46 AM
Thu, Feb. 19, 8:41 AM
- Vale (NYSE:VALE) says it produced a record 319.2M metric tons of iron ore in 2014, up 6.5% Y/Y and 7.2M tons above the company's guidance, after producing 83M tons in Q4 for a 2% Y/Y increase.
- Vale’s nickel output for the year increased 5.7% to 275K tons, the highest since 2008 but 14K tons short of guidance due to operational issues at several facilities; output rose 8.4% in Q4 to 73.6K tons, thanks to sharply higher production from new mines in New Caledonia and Brazil.
- Copper production rose 11% in Q4 to 58.4K tons to finish the year up 13% at 208K tons.
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.
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, 5:14 PM
- Vale (NYSE:VALE) -1.4% AH after revealing plans to cut dividends to the lowest level since 2007 in an attempt to shore up cash as commodities prices continue to fall.
- Vale is proposing to its board a $2B minimum dividend payment for 2015, down from $4.2B last year.
- Iron ore prices have been chopped by more than half since early 2014 and touched five-and-a-half-year lows today.
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, 5:42 PM
- Vale's (NYSE:VALE) credit rating is downgraded by Standard & Poor’s for the first time in more than eight years, as market fundamentals for iron ore continue to weaken and erode Vale's operating cash flow generation as the company's capital expenses remain high.
- The downgrade follows S&P's revision of iron ore price assumptions to $65/ton in 2015 and 2016 and to $70/ton in 2017.
- S&P reduces its rating to BBB+, the third-lowest investment grade, from A-.
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. 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, 2:54 PM
- Former Xstrata CEO Mick Davis is considering a bid for Vale’s (VALE +1.3%) nickel business, according to a Bloomberg report.
- Davis’ X2 resources investment is said to value Vale’s nickel business at $5B-$7B, but the report says there has not yet been any formal negotiation between X2 and Vale about the assets.
- Vale, the world's leading nickel producer as well as the biggest iron ore miner, has said its nickel output will climb to 303K tons this year.
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.
Dec. 22, 2014, 6:15 PM
- Global iron ore producers fell today after Australia's Department of Industry slashed its iron ore price estimate by a third due to surging output, which has outpaced Chinese demand and growth, creating a surplus.
- Iron ore prices will average $63/metric ton, vs. $94/ton forecast in September and this year's expected average of ~$88, according to the government's latest quarterly report.
- Ore with 62% content delivered to Qingdao, China, fell 1.8% to $67.90/metric ton, the lowest price since June 2009 and extending this year’s rout to 50%.
- Not everyone is quite so gloomy: Prices appear oversold and there’s potential for a relief rally in H2 2015, Australia & New Zealand Banking says, forecast iron ore to average $80/ton, noting that any recovery will be driven by supply cuts, including high-cost mines in China, where the industry is losing at current prices.
- During today's trading: BHP -2%, RIO -1.8%, VALE -0.6%, CLF -7.9%.
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