RECENT Basic Materials RESEARCH
With copper prices trading sideways this month, copper miners also had a dull month. Freeport-McMoRan (FCX) fell 0.42% in November.
While geopolitical tensions, low US inflation, and uncertain policy reforms have been supporting gold, the other key factors have been working against it.
On November 30, 2017, Axalta (AXTA) announced that it has ended its acquisition talks with Nippon Paints.
On November 29, 2017, PotashCorp (POT) provided an update on its recent activities and an update on the fertilizer industry for all three NPK (nitrogen, phosphorous, and potassium) macronutrients.
Alcoa (AA), the leading US-based aluminum producer, has gained 47.8% in 2017, based on November 30 closing prices.
Albemarle (ALB) is set to pay its 4Q17 dividend on January 2, 2018. It has made no changes to its quarterly dividend and will pay a dividend of $0.32 per share on its outstanding shares.
RGLD, NEM, GFI, and BVN have call implied volatilities of 24.8%, 25.9%, 40.4%, and 35.3%, respectively. The volatility in these stocks is often much higher than the volatility in precious metals.
Iron ore prices in 2017 so far have been a roller coaster ride. Prices reached a peak of $95 per ton in February only to slump to a low of $53 per ton in July and take off soon after.
Freeport-McMoRan (FCX)—the second-largest copper miner, after the Chilean government-owned Codelco—is trading with year-to-date (or YTD) gains of 6.8%, based on November 27 closing prices.
On a year-to-date basis, PPG stock has risen 22.3% and has outperformed the broad-based SPDR S&P 500 ETF (SPY).
Praxair (PX) stock has been a strong performer so far in 2017. On a year-to-date basis, the stock has risen 29.8% and outperformed the SPDR S&P 500 ETF (SPY), which has risen 16.4%.
Last week, Intrepid Potash (IPI) emerged as the top gainer in the industry with its stock closing 5.6% higher at $3.78.
Last week was broadly positive for industrial metals (DBC). Copper rose 3.6%, while aluminum prices rose 1.3% in the week ending November 24.
The skyrocketing price of palladium has attracted considerable attention by precious metal observers. Palladium has risen 45.0% year-to-date.
On September 12, 2016, PotashCorp and Agrium announced their intention to combine in a merger of equals. But China and India have set conditions.
While gold has been volatile overall in 2017 so far, profit-taking has taken over in the metal space recently. Market participants are expecting a rate hike from the Fed in December, which could be negative for gold prices.
On November 21, 2017, Axalta announced that it backed out of the possible merger with Akzo Nobel. The companies couldn’t agree on the merger terms.
As December approaches, discussion of a potential interest rate hike is growing. In this series, we’ll look at how the US dollar and interest rates affect precious metals.
Cleveland-Cliffs’ (CLF) 3Q17 earnings and revenues beat expectations. However, its stock fell when its management downgraded its volume guidance for 2017.
Dow Chemical and DuPont completed their merger on August 31, 2017. The newly merged entity, DowDuPont (DWDP), was listed on September 1, 2017.