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
Dec. 1, 2014, 11:38 AM
- BHP Billiton (BHP -1.5%) iron ore president Jimmy Wilson said this weekend that plunging iron ore prices had been anticipated given their forecasts that supply growth would exceed the growth in demand, and signals there will be no slowdown in the drive to boost production by global iron ore producers.
- “Even the iron ore price where it is today can induce more volume,” Wilson told Australia’s Nine Network, and "if that volume doesn’t come from our business, it’s going to come from other businesses around the world and other countries around the world.”
- Bernstein analyst Paul Gait recently said: "If BHP do not value the products that they mine but are quite happy to dump them on the market whatever the price, then it is hard to see why anyone should value the company associated with such activity."
- Also: RIO -0.2%, VALE -3.4%, CLF -7.6%.
Nov. 21, 2014, 10:06 AM
- Petrobras (PBR +7.2%) and Vale (VALE +9.6%) surge higher in anticipation that Brazil may appoint a new market-friendly finance minister today, perhaps signaling a shift away from the leftist, interventionist policies blamed for Brazil's stagnant economic growth in recent years.
- One of three reported finalists for the job is University of Chicago-trained Joaquim Levy, CEO of Bradesco Asset Management, an arm of Banco Bradesco (BBD +4.9%); he is considered a fiscal hawk who helped Brazil obtain its investment credit grade in a previous stint at treasury secretary.
- The other contenders are said to be central bank president Alexandre Tombini and Nelson Barbosa.
- Also: ITUB +3.8%, BSBR +2.9%, GOL +4.6%.
- ETFs: EWZ, BRF, BRXX, EWZS, BRZU, BRAQ, BZQ, BRAZ, BRAF, UBR, BRZS, DBBR, FBZ
Nov. 21, 2014, 9:13 AM
Nov. 18, 2014, 12:49 PM
- Iron ore extends its tumble deeper into five-year lows as declining home prices in China add to worries that an economic slowdown in iron ore's biggest buyer will deepen and exacerbate an oversupply.
- Ore with 62% content delivered to Qingdao, China, has retreated 47% YTD to $71.80 a dry ton, and Citigroup thinks prices may drop to less than $60/ton next year as output rises further and demand remains weak; China’s bad loans climbed in Q3 by the most since 2005, while new-home prices declined, adding to speculation the cooling economy will weaken further.
- VALE -2.9%, RIO -1.9%, BHP -1.1%, CLF -6%, X -1.4%, AKS -1.9%.
Nov. 11, 2014, 12:52 PM
- Vale (VALE -2.5%) tumbles to eight-year lows after Citigroup recommends selling the stock on falling expectations for iron ore prices.
- Citi's global commodity team downgrades shares to Sell from Neutral as it cuts its forecast for iron ore prices in 2015 and 2016 by 19% to $65/ton.
- Citi sees Vale generating $7.5B in operating cash flow next year, which the firm says is insufficient to cover planned investments, and expects the company to defer maintenance capex, sell more assets and increase net debt.
Nov. 7, 2014, 10:58 AM
- Iron ore prices cap their biggest weekly decline in more than five months and its third straight week of losses amid an expanding global surplus.
- Ore with 62% content delivered to Qingdao lost 4.7% this week to $75.84/dry metric ton, data from Australia's Port Hedland showed record iron ore exports last month, and steel mill closures ordered by China this week to curb air pollution for a global summit also was seen hurting demand.
- Iron ore has lost 44% YTD as producers including Vale (VALE +3.2%), BHP Billiton (BHP +3.7%) and Rio Tinto (RIO +2.6%) expanded supplies, and ABN Amro's Ben Cheung does not expect the oversupply situation to be alleviated next year.
- Vale, which is seeking to boost output by 50%, this week opened its $1.4B port in Malaysia where its Valemax vessels can unload cargoes for onward shipping to clients in Asia in smaller vessels.
Oct. 30, 2014, 7:59 AM
- Vale (NYSE:VALE) -6% premarket after reporting a surprising Q3 net loss due a sharp depreciation in the Brazilian real and the lowest iron ore prices since 2010.
- Vale posted a $1.44B Q3 loss from a net profit of $3.5B a year earlier and analyst consensus expectations for a $1.49B net profit, hit by $2.68B in foreign exchange and monetary losses on debt and derivatives; EBITDA fell 48% Y/Y to $3B.
- Vale’s average sales price for iron ore plunged 36% Y/Y to $68.02/ton from $109.93.
- Produced a record 85.7M metric tons of iron ore but inventories rose by 9.3M tons, as protests that closed its main railroad in northern Brazil contributed to stockpiles.
- Since ferrous metals, mostly iron ore, account for nearly two-thirds of Vale’s sales, Q3 net revenues sank 27% Y/Y to $9.06B, the company's lowest revenue since Q1 2010 and below expectations of $9.65B.
- Says it completed construction of its 30M tons/year Teluk Rubiah distribution center in Malaysia, which will allow it to cut costs in Asia, and began operations from its Serra Leste iron ore plant at the Carajas complex in Brazil.
Oct. 27, 2014, 10:31 AM
- It's an ugly open for Petrobras (PBR -14.2%) following Pres. Rousseff's re-election as Brazil's president, as hopes are dashed for a regime change that might have helped investor confidence in the country and the company.
- Rousseff's victory "was not totally priced in yet," Loomis Sayles analyst Bianca Taylor says, adding that she expects a slump in Brazil assets as a whole in the next few days.
- PBR and state-controlled utility Centrais Eletricas Brasileiras (EBR -12.3%) were the two worst performing stocks in the 834-member MSCI Emerging Markets Index this morning.
- Also: VALE -5.9%, ITUB -6.5%, BBD -8.1%, GOL -7.6%.
- Brazil ETFs: EWZ -6.7%, BRF, BRXX, EWZS, BRZU, BRAQ, BZQ, BRAZ, BRAF, UBR, BRZS, DBBR, FBZ
Oct. 27, 2014, 9:13 AM| 1 Comment
Oct. 27, 2014, 7:12 AM
- The iShares MSCI Brazil Index ETF (NYSEARCA:EWZ) is lower by 9.5% premarket after President Rousseff narrowly won re-election over the weekend.
- Petrobas (NYSE:PBR) -16.5%, Vale (NYSE:VALE) -6.5%
- The iShares S&P Latin America 40 Index (NYSEARCA:ILF) -2.2%
- ETFs: EWZ, BRF, ILF, BRXX, EWZS, BRZU, LBJ, BRAQ, BZQ, BRAZ, GML, BRAF, UBR, BRZS, DBBR, EEML, FBZ, FLN
Oct. 24, 2014, 11:11 AM
- An outlier of a poll shows opposition candidate Aecio Neves with a sizable (though shrinking) lead over President Dilma Rousseff. Other polls have consistently shown Rousseff with a lead of six to eight percentage points. Still to come is big debate between the two contenders tonight. The election is on Sunday.
- The credibility of opinion polling is somewhat suspect in Brazil, with different surveys showing wildly different results, not to mention all the major pollsters failing to capture the extent of Neves' support ahead of the first round of elections earlier this month.
- The Bovespa is up 3.6%. EWZ +5.3%
- Petrobas (PBR +6.3%), Vale (VALE +4.4%), Itau Unibanco (ITUB +6.1%), Banco Bradesco (BBD +5.5%), Gol Linhas (GOL +6.6%)
- ETFs: EWZ, BRF, BRXX, EWZS, BRZU, BRAQ, BZQ, BRAZ, BRAF, UBR, BRZS, DBBR, FBZ
- The iShares S&P Latin America 40 (ILF +3%)
- Broad South American ETFs: ILF, LBJ, GML, EEML, FLN
Oct. 23, 2014, 8:34 AM
- Vale (NYSE:VALE) -2.3% premarket after saying its Q3 iron ore output rose 3.1% to 85.7M metric tons from 83.1M tons a year ago and is on track to set a record for the year despite plunging prices.
- Output beat the previous quarterly record of 85M tons set in Q3 2011; YTD, iron ore output has climbed 8.1% at 236.2M tons, the highest ever.
- Q3 iron ore shipments fell by 3.6M tons due to protests at its cargo railroad out of Carajas in September, resulting in a 9.3M ton increase in iron ore global stocks.
- Q3 nickel production rose 16% Y/Y to 72.1K tons after the company brought the Onça Puma mine in Brazil online this year.
- Copper output rose 11% to 104.8K tons, and coal production fell 1.5% to 2.34M tons.
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