Potash and Trio’s margins being below zero for a sustained period may prove dangerous for Intrepid Potash. The company’s having higher costs than its selling prices is simply not sustainable.
Potash’s market (SOIL) includes big fish such as PotashCorp (POT), The Mosaic Company (MOS), and Agrium (AGU), along with international players.
Sales for commodity companies such as Intrepid Potash, PotashCorp (POT), Agrium (AGU), and CF Industries (CF) are a function of shipments and realized prices.
In recent quarters, Intrepid Potash’s sales have suffered significantly. The company’s sales come from two products: potash and langbeinite, also known as Trio.
Intrepid Potash (IPI) stock has remained weak in terms of performance so far this year. On March 22, 2017, Intrepid Potash was trading at a fall of 22% year-to-date.
Freeport’s 2017 guidance could be in disarray because of Grasberg issues. Freeport’s debt reduction plan would be impacted due to the Grasberg impasse.
Currently, Freeport is barred from exporting copper concentrates from Indonesia. The company’s export permit expired earlier this year.
Currently, total copper inventories in LME-registered warehouses stand at ~330,000 metric tons—similar to levels at the beginning of the year.
Miners such as Freeport-McMoRan (FCX) and Glencore (GLNCY) (UK) (UKX-INDEX) depend on Chinese metal demand.
According to estimates from Thomson Reuters, ~200,000 metric tons of copper production have been lost due to production stoppages until March 21.
Copper closed at $5,741 per metric ton on March 23. Copper has risen 4.0% in 2017. In 2016, copper prices rose 17.4% and ended a five-year price drought.
Freeport-McMoRan closed at $12.83 on March 23—0.23% lower than its closing the previous day. So far, 2017 has been a somber year for Freeport investors.
After a weak performance on Thursday, crude oil prices are slightly higher on Friday. Higher US crude oil inventory levels are weighing on the oil market.
Mining funds such as the leveraged Direxion Daily Gold Miners (NUGT) and the Direxion Daily Junior Bull Gold 3X (JNUG) rose substantially at the beginning of 2017.
The past few weeks have been choppy for metals due to concerns surrounding the Fed’s interest rate hike.
Mining funds such as the iShares MSCI Global Gold Min (RING) and the leveraged ProShares Ultra Gold (AGQ) have also seen significant correlations with their respective precious metals.
When analyzing the precious metals market, it’s important to take a look at the relationship between gold and silver.
Coeur Mining and its closest peers are currently trading below their 20-day and 50-day moving averages.
Coeur Mining (CDE) is trading at a forward EV-to-EBITDA multiple of 5.3x. That’s the lowest among its peer group (SIL).
The market consensus rating for Coeur Mining stock is a “buy” from 67.0% of analysts. About 33.0% are recommending a “hold.”