Why Did Copper, Gold, and Silver Fall on Wednesday?
Copper started Wednesday on a weaker note because of the weak sentiment in China and the stronger dollar.
After volatile overnight trading, crude oil rose early today only to give back its gains.
Haven bids have lifted up precious metals in 2016. The bids have helped precious metal miners and funds based on precious metals.
The gold-silver ratio is important to consider when doing a comparative study of these two precious metals. The gold-silver spread was trading at 73.6 as of May 2, 2016.
Unforeseen events triggered the sudden increase in precious metals at the beginning of 2016. The year started with a bang and took precious metals on a high ride.
Copper is trading lower on Wednesday morning because of the stronger dollar and China’s weak manufacturing data released recently.
For the week ended April 29, 2016, MOP (muriate of potash) prices stood at $277 per metric ton, which remained unchanged over the previous week.
It takes between 1.6 metric tons and 1.7 metric tons of phosphate rock to produce a single metric ton of DAP, according to Mosaic.
The phosphate inventory on April 29, 2016, remained unchanged at 806,000 short tons, or 731,000 metric tons—higher than the previous year’s level of 689,000 short tons, or 625,000 metric tons. This would be 19% higher YoY (year-over-year).
Despite MAP’s price fall over the past one-year period, it seems to be recovering and staying above the low of $329 per metric ton that we saw in the second half of February 2016.
For the week ended April 29, 2016, the average price of DAP in the US Cornbelt remained unchanged at $353 per metric ton, or $390 per short ton, from the previous week.
Coal prices, like natural gas prices, have hit a low point due to low demand and excess supply imbalance. Recently, natural gas prices have ticked up while coal prices are mostly unchanged.
Natural gas is the key raw material for the production of nitrogen fertilizers such as ammonia. Due to the abundant availability of natural gas, the nitrogen fertilizer industry is fragmented among several producers.
Most of the global ammonia production is upgraded to urea. Urea prices have rebounded from their lows at the beginning of 2016, especially in the US Cornbelt region, implying that demand has picked up.
In the week ended April 29, 2016, the US domestic market (XLB) saw mixed price movement for ammonia.
Fertilizer prices constitute the biggest factor impacting the performance of fertilizer companies. In this series, we’ll see how the prices of NPK and raw materials changed in the week ended April 29, 2016.
Alcoa had a three-year target of $7.2 billion in revenues, but it has reduced this target to $6 billion–$6.2 billion ahead of the Arconic split.
Alcoa’s value-add business, which will be part of Arconic after the split, generated EBITDA of $537 million in 1Q16, as compared to $500 million in 1Q15.
Arconic had revenues of $3.3 billion in 1Q16, which is similar to its 4Q15 revenues. But revenues declined by 3.3% YoY (year-over-year).
Alcoa’s upstream business generated an ATOI of $22 million in 1Q16 and contributed $185 million to Alcoa’s consolidated 1Q16 EBITDA.