Aluminum spot prices in April are holding steady amid the correction in other commodities. However, April aluminum prices recently moved to backwardation.
Aluminum was trading at $1,770 per metric ton on April 10. Aluminum prices have largely traded sideways so far in April.
Alcoa has lost almost a sixth of its market capitalization so far in 2015. Aluminum industry indicators have taken a beating since the middle of last year.
Alcoa faced cost pressures in its packaging segment. It also faced higher operating costs, as it ramped up production at its Saudi Arabia rolling mill.
Alcoa’s alumina segment contributed $221 million in 1Q 2015, or 35%, to the company’s after-tax operating income.
Alcoa prices its aluminum with a 15-day lag to LME aluminum prices. Its 1Q earnings lost $84 million due to a decline in aluminum prices.
Alcoa’s (AA) downstream business generated after-tax operating income of $191 million in 1Q 2015, its highest-ever after-tax operating income.
Alcoa (AA) reported its 1Q 2015 earnings on April 8. It reported net income of $195 million on revenues of $5.8 billion.
Weakness in China’s real estate market is one of the main reasons for the steel industry slowdown there. Construction has stalled.
The Fort Hills project is an aggressive investment in the energy business. Teck Resources owns a 20% stake in the oil sands development.
The Teck Resources timeline can be traced back to 1906 to the Consolidated Mining and Smelting Company of Canada. Teck Cominco was established in 2001.
Asia is the largest market for the Teck Resources coal segment. A quarter of its sales go to China, and the rest of Asia accounts for half.
In 2014, its zinc operations contributed 31% to revenues and made up 27% of gross profit before depreciation and amortization.
Teck Resources is among the top ten copper producers in the Americas. Its copper assets include mines in Canada, Peru, and Chile.
Teck Resources started a cost rationalization program within its business units in 2012. This should help it ride out weak commodity prices.
A review of Teck Resources key financials show revenues have fallen for three consecutive years. Corrections in copper and coal prices are mainly to blame.
Liquidity and leverage are some of the key metrics that analysts track on any company’s balance sheet. A comfortable liquidity ratio is a positive thing.
The competitive landscape for Teck Resources includes players from both the coal and copper mining industries.
The company’s 2015 outlook could be affected by a continued slowdown in China’s steel industry as well as growing coal production in India.
In this series, we’ll present a complete business overview. We’ll discuss the key things you should know before investing in Teck Resources.