The material sector felt minor contraction this week, with S&P 500 Materials index down 0.98% and the Materials Select Sector SPDR (NYSEARCA:XLB) down 0.30%.
Base metal prices fell on Monday, on continuing worries over a potential global recession as well as demand in China due to new coronavirus restrictions. According to Reuters, benchmark copper (HG1:COM) on the London Metal Exchange was down 2% at $7,648/metric ton; aluminum, zinc and nickel also fell, while lead and tin posted modest gains.
By Friday, copper prices slumped below $7K/metric ton for the first time since Nov. 2020, after weaker than expected economic data in China deepened fears about metals demand. Prices went as low as $6,955/ton before paring losses to ~$7K, down around 10% for the week. London nickel fell to nine-month lows, while aluminum, zinc and tin also fell on Friday.
Iron ore prices tumbled below $100/metric ton on Friday. The most-traded September iron ore contract (SCO:COM) on China's Dalian Commodity Exchange ended daytime trade -10% at 645 yuan/metric ton ($95.32) after falling as low as 641.50 yuan, according to Mining.com.
Gold, meanwhile, dropped up to 2% to nearly one-year lows on Thursday, as the dollar extended its rally following hotter than expected U.S. inflation that solidified expectations for aggressive interest rate hikes from the Federal Reserve. Gold spot price (XAUUSD:CUR) settled at $1,707.58/oz on Friday, down ~2% for the week. Read why SA columnist Kevin George believes "Gold Prices Could Be Heading For $1,400."
Take a look at this week's top gainers among basic material stocks ($2B market cap or more):
- Alpha Metallurgical Resources (AMR) +12.63%
- Hecla Mining (HL) +4.72%
- Martin Marietta Materials (MLM) +3.91%
- Sherwin-Williams (SHW) +3.52%
- Enviva (EVA) +3.44%
The week's top decliners among basic material stocks ($2B market cap or more) were:
- Sibanye Stillwater (SBSW) -11.68%
- Suzano (SUZ) -8.84%
- Ternium (TX) -8.83%
- Barrick Gold (GOLD) -8.26%
- Vale (VALE) -7.87%
Other materials ETFs to watch: iShares Global Timber & Forestry ETF (WOOD), Materials Select Sector SPDR ETF, Vanguard Materials ETF (VAW), iShares Global Materials ETF (MXI), SPDR S&P Metals and Mining ETF (XME), VanEck Vectors Gold Miners ETF (GDX), iShares MSCI Global Gold Miners ETF (RING), Global X Copper Miners ETF (COPX).