On January 29, Freeport-McMoRan, gained by nearly 4.1% and ended the day at $4.60. Other base metal companies also saw gains on January 29.
On January 29, 2016, base metals on the LME gained. Base metal miners Freeport-McMoRan, Alcoa, and BHP Billiton gained by 4%, 4.1%, and 0.55%, respectively.
On January 25, J.P. Morgan downgraded PotashCorp’s stock to “neutral” from “overweight.” But about 35% of analysts have issued “buy” recommendations.
In its recent 4Q15 earnings release, PotashCorp finally slashed its dividends by 34%.
In the fertilizer commodities business, margins are thin and fertilizer prices can significantly impact a company’s margins.
About 51% of PotashCorp’s net sales from its phosphate segment come from feed and industrial products while the remaining 49% come from fertilizer products.
PotashCorp’s phosphate segment contributes about 30% of revenue and 10% toward gross margins. The segment saw a 11.6% sales decline to $441 million in 4Q15.
PotashCorp’s nitrogen segment contributes about 30% of total revenues and about 32% toward gross margins. In 4Q15, the segment saw a 26% fall in revenues.
Both prices and shipments impact revenue, so despite the decline in shipments, an increase in average selling price can help boost revenues.
PotashCorp’s potash segment contributes about 40% to the company’s total revenues. In 4Q15, this segment experienced a 41% fall in revenue to $454 million.
PotashCorp earns ~37% of its total sales from its potash segment, about 31% from its nitrogen segment, and the remaining 32% from its phosphate segment.
PotashCorp just reported its 4Q15 earnings, with EPS at $0.24 and YTD shares falling by 9.7%. Its competitor, the Mosaic Company, has fallen by 16.6%.
The rise of precious metals as stock markets took a downward turn lifted many mining companies. Gold and silver futures for April and March expiry, respectively, have risen 4.6% and 3.3% on a 30-day trailing basis.
January was gold’s best month in about a year. Gold ranked as the second-best investment on the S&GSCI index
All precious metals saw a down day once again on January 28, 2016. Gold, silver, platinum, and palladium retreated 0.01%, 1.6%, 1.6%, and 2%, respectively.
Gold stood strong in January 2016. Chinese market turbulence, further driven by tensions in the Middle East, brought the haven appeal of gold to its peak.
All precious metals saw a down day on January 28, 2016. The fall in precious metals was most likely due to the rise of the US dollar.
Cliffs Natural Resources’ (CLF) share price has fallen by 78% in 2015 and another 5% since the start of 2016, through January 28.
Of the 15 analysts covering the Cliffs, eight have given it a “hold” recommendation, and seven have given it a “sell” recommendation. The stock has received no “buy” recommendations.
Cliffs Natural Resources ended 4Q15 with net debt of $2.4 billion as compared to $2.5 billion at the end of 3Q15.