Key Players’ Phosphate Segment Margins in 1Q17
Mosaic (MOS) continued to enjoy higher margins at 7%—compared to Agrium’s (AGU) margins at 5%. Mosaic’s margins were flat year-over-year.
Ammonium phosphates are the most widely used phosphate fertilizers in the world. DAP is the most used among phosphate fertilizers.
Mosaic (MOS), PotashCorp (POT), Agrium (AGU), and Israel Chemicals (ICL) are some of the largest producers (MOO) of phosphate fertilizers like DAP and MAP.
What’s to Blame for Alcoa’s Recent Woes?
Alcoa (AA) closed at $31.63 on May 17, losing 1.7% from its previous day’s close.
Aluminum prices are the key driver of aluminum producers’ earnings.
According to consensus earnings estimates compiled by Thomson Reuters, analysts expect Alcoa to deliver EBITDA of ~$2.0 billion this year.
Must-know: Factors that influence the cement industry
The cement industry is highly affected by regulatory norms. This is prominent in developed countries where environmental issues are more stringent. This adds to the companies’ costs.
An increased focus on infrastructure development increases cement demand. This effect is prominent in emerging economies. A substantial portion of this demand comes from infrastructure projects. The projects are funded by the government.
The cement industry relies on power. Power and fuel costs account for ~30% of the price of cement when it’s sold. As a result, power and fuel have a major impact on the company’s operating expenditure.
Eastman Chemical Comes Up with Treva, a New Bioplastic
On May 15, 2017, Eastman Chemical (EMN) introduced Treva, a breakthrough in engineering bioplastics.
On May 15, 2017, Praxair’s (PX) subsidiary NuCo2 announced the launch of XactCO2, a high-pressure carbon dioxide cylinder that can be mounted to any wall.
On May 18, 2017, Celanese (CE) announced price increases for propionic anhydride, isobutyric anhydride, and N-butyric anhydride for Europe only.
How Are Freeport’s Cash Flows Looking amid the Current Turmoil?
Along with shipments and profits, the market is also interested in mining companies’ cash flows and leverage positions.
For commodity companies like BHP Billiton (BHP) and Glencore (GLNCY), the EV-to-EBITDA multiple is the preferred valuation metric.
For companies in the commodity space, EBITDA (earnings before interest, tax, depreciation, and amortization) is the most common metric.
Analyzing Valuation Catalysts for Cliffs Natural Resources
Cliffs Natural Resources (CLF) is trading at a forward EV-to-EBITDA multiple of 5.4x, compared to its trailing-five-year average of 9.7x.
Cliffs Natural Resources (CLF) has garnered “buy” and “sell” recommendations from 25% of analysts each, while 50% of analysts have recommended “holds” on the stock.
Among the most dominant factors driving the recent iron ore price rally are higher steel production and the rise of steel prices in China (FXI).
How Does SQM Compare to Its Peers?
SQM has outperformed its peers based on PE ratio. The PE ratios of SQM, POT, MOS, and CMP are 20.3x, 11.5x, 9.6x, and 15.4x, respectively, as of November 17, 2015.
Sociedad Química y Minera de Chile (SQM) has a market cap of $5.7 billion. After the company’s 3Q15 earnings report, SQM fell by 5.6% to close at $18.49 per share on November 17, 2015.
Looking ahead, SRC said it has seen the early signs of a recovery in the resource sector, and expects it to continue to be a challenging environment for many commodities-focused businesses throughout 2014 and into 2015.
How Are Mining Stocks Correlated to Precious Metals?
Mining companies saw a rise in their price during the past few trading days. Safe-haven bids could have contributed to rising precious metal prices.
On May 17, 2017, the implied volatility of First Majestic Silver, New Gold, Royal Gold, and Goldcorp stood at 54%, 55.5%, 28.9%, and 31.1%, respectively.
Agnico Eagle (AEM), Coeur Mining (CDE), Eldorado Gold (EGO), and IAMGOLD (IAG) have risen 16.2%, 2.3%, 4.7%, and 14.3% YTD, respectively.
Understanding Environmental Regulations and Efficiency Trends in Specialty Chemicals
Greater community awareness toward the degradation of the atmosphere is forcing specialty chemical companies to comply with environmental regulations.
When the specialty chemicals industry entered a mature phase in the mid-1990s, innovation came to be characterized by small steps rather than by big leaps.
Companies in the specialty chemical industry have fewer intermediaries in their distribution range as they move from coatings to more specialized chemicals.