Miner cost cutting to continue, Cowen Says

|By:, SA News Editor

Big miners are rallying today as China’s economy shows signs of life but Cowen analysts warn it would be foolish for investors to assume that commodity prices will soar back to their previous levels, if only because mining companies have been cutting costs as if they expect prices will stay low.

The rush to cut costs has been felt the hardest by mining-industry suppliers, including Caterpillar (CAT -0.1%) and Joy Global (JOY +0.9%), Cowen says, because cancelling orders for new equipment is one of the easiest ways to cut costs.

Among S&P 500 mining stocks, FCX +2.9%, CNX +2.6%, NEM -0.2%.