In April, Chinese steelmaker Baoshan Iron & Steel announced that it would cut prices for its steel products—its first cut in ten months.
China’s iron ore port inventory reflects supply and demand. It also indicates the safety net and imbalance between iron ore supplies and steel mill demand.
Analysts have been expecting a downturn in iron ore. Analysts upgraded their short-to-medium-term forecasts, but they’re still not positive about long-term fundamentals.
Rio Tinto’s (RIO) CEO (chief executive officer) said that the company can maintain cash returns even if iron ore prices drop to near record lows.
Iron ore prices have pulled back significantly in the past few weeks on concerns of weaker Chinese demand.
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.
On May 20, 2017, Dow Chemical (DOW) signed an agreement with Saudi Arabia to construct a manufacturing facility that will produce varieties of polymers.
On May 15, 2017, LyondellBasell Industries (LYB) said it’s set to build a polyethylene plant at its La Porte, Texas, facility.
On May 18, 2017, 3M (MMM) said it received orders from the United States Army for PELTOR TEP-100 earplug kits and PELTOR ComTac communication headsets.
On May 15, 2017, International Flavors & Fragrances (IFF) announced its intention to raise $500.0 million in senior notes due in 2047.
On May 19, 2017, PPG (PPG) announced it has entered into an agreement with Vision Systems to develop window shading solutions for aircraft.
On May 17, 2017, Axalta (AXTA) received approval to renew two of its premium refinish brands—Spies Hecker and Standox—used to repair BMW passenger cars.
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.
Copper miners that are holding onto their assets or expanding operations in today’s depressed pricing environment could be in better positions to reward shareholders.
BHP Billiton’s (BHP) Escondida, the world’s largest copper mine, faced labor complications in 1Q17, as did Freeport-McMoRan and Southern Copper.
Copper prices showed strength in 1Q17, as markets started to factor in a deficit in 2017.