What Led to the Rise of Base Metal Miners?
Base metal miners react to the rise of metals
The equities of base metal miners found some support from the positive rally of base metals on February 8. The base metals surged with tin leading the group. Investors in miners reacted positively on Monday.
Interested in AA? Don't miss the next report.
Receive e-mail alerts for new research on AA
Freeport-McMoRan stays below $6
Despite the rise of most miners on Monday, Freeport-McMoRan (FCX), one of the largest copper producers in the world, fell for the second consecutive trading day. FCX fell 7.2% and closed the day at $5.27. On February 8, FCX hit an intraday high of $5.93, very close to the important resistance level of $6. Freeport-McMoRan started this year on a negative note and carried the negative momentum through January 13, when it closed at a multiyear low of $3.74. FCX started its recovery with the help of positive momentum from copper and has risen 41% from that multiyear low. However, since the beginning of 2016, FCX has fallen 22.2%.
Glencore continues to gain
Glencore (GLNCY), the metals trading and mining giant, rose for the fourth consecutive trading day on February 8. Glencore rose 2.8% and ended the day at $2.95. This was the highest closing price for Glencore since November 11, 2015. Even though Glencore began this year on a negative note, it started recovering in mid-January. The price level of $3 is the nearest prominent resistance level for Glencore. Alcoa (AA), one of the largest aluminum producers in the world, fell for the second consecutive trading day and closed below the support level of $8.
BHP Billiton (BHP), an Anglo-Australian mining corporation, rose 0.6% on Monday and ended the day at $22.71. BHP hit a multiyear low of $19.38 on January 20 and is currently trading 17.2% above that low. The PowerShares DB Base Metals Fund (DBB) rose 1.4% on February 8, whereas the SPDR S&P Metals and Mining ETF (XME) fell 1.7%.