BHP Billiton Limited
Why Rio Tinto has key advantages over its peers
Rio is the largest owner and operator of autonomous—driverless—trucks in the world. These initiatives are part of Rio’s “Mine of the Future” program.
Must-know: Is the share buyback the right thing to do?
Cliffs Natural Resources’ (CLF) new management changed the terms of its debt agreement to repurchase the company’s shares. The shares are worth up to $200 million.
Copper Weaker on August 19 Due to Weaker Demand Signs
After starting the day with decreased momentum, copper prices remains mixed on Friday, August 19. At 1:50 PM EDT on August 19, the COMEX copper futures contract for September delivery was trading at ~$2.17 per pound, a gain of ~0.16%.
All of the Base Metals Recovered Except for Tin
After a string of losing days, base metals recovered on January 13, 2016. Except for tin, all of the base metals rose on January 13 in the LME.
How China’s Credit Growth Could Progress in 2018
Aggregate financing in China (MCHI) came in at 1.6 trillion yuan in November 2017.
Base Metal Miners Recover
In the week ended December 26, the equities of all major base metal miners gained, recovering from losses in the week prior.
UK Industrial Production Regained Strength in August
With a rise in mining and quarrying activities, the UK industrial production index rose by 1% in August 2015 against a fall of 0.3% in July.
Copper Rose to 1-Month High Price Levels on September 20
At 1:15 PM EST on September 20, the COMEX copper futures contract for December delivery rose ~0.35%. It was trading at $2.16 per pound.
China’s Credit Growth Metrics Also Worsen in April
China’s credit growth clearly has been weaker than expected, especially given the recent easing measures adopted by the government.
Why BHP focuses on productivity
Under equipment, the focus is on increasing availability, utilization, and rate. A 6% increase in utilization helped achieve a 9% increase in group production in FY14.
How does Chinese credit easing help iron ore names?
The immediate impact of Chinese credit easing was seen as China’s iron ore and rebar futures posted their strongest gains in three weeks.
China’s industrial output growth slows in November
FAI is a good indicator of how much investment occurs in a country or region. It’s a closely watched indicator of construction activity in China.
Copper Weakened amid Recovery in Dollar on August 3
After starting the day on a weaker note on Wednesday, August 3, copper maintained the same sentiment throughout the day and declined lower.
Copper Remains Stable as Brexit Fears Eased
Although the fundamentals are not as supportive of the Market’s sentiment, the weakness of the dollar and decreased anxiety over the Brexit vote helped copper on Friday.
China’s Crude Steel Production Impacts Iron Ore Miners Like Vale
Since 98% of mined iron ore goes into making steel, it’s important to track steel production. China consumes two-thirds of seaborne iron ore.
Copper, Gold, and Silver Are Trading Lower on Thursday Morning
Copper is trading lower on Thursday. At 6:36 AM EST, the COMEX copper futures contract for July delivery was trading at $2.06—a decline of 1.1%.
Why Did Copper Ignore Stimulus from China?
Copper prices experienced a roller coaster ride on Monday after important market-moving news from China.
Japanese iron ore imports were flat year-over-year in 2014
Japan accounts for 10%–13% of the seaborne market, so Japanese iron ore imports are another good indicator of demand.
Why is the market reacting?
Market analysts have started turning bearish on Cliffs Natural Resources (CLF). There are many downgrades. The target price has been revised down in recent weeks.
Why the demerger of non-core assets makes sense for BHP
BHP had been contemplating whether to sell the non-core assets or go for a demerger. Finally, the company decided in favor of a demerger on August 15. The proposed company will likely have assets in the range of $12–$20 billion.
Base Metal Miners on Tuesday, March 22: Some Up, Some Down
Freeport-McMoRan (FCX), one of the largest copper miners, rose for the second consecutive trading day on Tuesday, March 22, 2016. It closed the day at $10.99, a rise of 1.8%.
Why Did Merrill Lynch Resume Coverage of Freeport-McMoRan?
On Wednesday, March 2, 2016, Merrill Lynch resumed Freeport-McMoRan’s (FCX) coverage, with a neutral rating and a price target of $9.
Factors That Could Cause an Upside to CLF’s Free Cash Flow in 2017
Cleveland-Cliffs’ management noted during its 4Q16 earnings call that it is expecting to generate FCF of $550 million in 2017.
Base Metal Miners Freeport-McMoRan and Glencore Fell Last Week
Freeport-McMoRan is one of the largest copper miners in the world. It fell for the second consecutive trading week. In the week ending on April 2, it fell 2.2%.
Copper Prices Hold at $4,500 amid Commodity Meltdown
Copper has been on a downtrend for nearly two months. The goodwill generated by supply cuts by major miners failed to last beyond a month, and copper again resumed its downtrend.
Alcoa’s Leverage Ratio Misses The Mark
Alcoa’s leverage ratio has increased over 2Q 2014. This basically means that the proportion of debt in Alcoa’s capital structure has increased.
Why Alcoa is improving its competitive position
Alcoa idled several smelting plants since 2007. Its aluminum smelting capacity has come down by 28% over the period. Most of these smelters had high unit production costs.
Why Vale’s Iron Ore Margins Should Remain Supported
In this series, we’ll see how Vale is planning to deal with the current volatile commodity price environment.
Must Know: Goldman Provided Fodder to Copper Bears
Goldman Sachs (GS) now expects copper prices to fall to $4,000 per metric ton this year. In its previous guidance, Goldman had expected copper to fall to $4,500 per metric ton in 2016.
What Does the Current Supply Outlook Mean for Iron Ore Prices?
The weak demand from China is hurting iron ore prices. The supply side, on the other hand, remains quite strong.
Copper, Gold, and Silver Are Stable Early on October 7
At 6:35 AM EST on October 7, the COMEX copper futures contract for December delivery was trading at $2.15 per pound—a fall of ~0.12%.
Why Did Base Metals Fall in the Second Week of March?
LME nickel fell to lower price levels last week and stood as the biggest loser in base metals. It fell 5.5% and ended the week at $8,830 per metric ton.
Must-know: Petroleum doing well, but potash is slow
Total petroleum production increased by 4% in fiscal year 2014 (or FY14). However, the highlight was the increase in liquids production. It was supported by a 73% increase in Onshore U.S. liquid volumes and nearly doubled production at Atlantis. This is important to note because liquid volumes are more profitable.
Why did the Cliff’s share price rally?
Iron ore prices are down 19% year-over-year (or YoY) and coal prices are down 30% YoY—volumes were also down YoY, but the stock rallied 7% in a single trading session the next day of the earnings call and up 3% the subsequent trading day.
Base Metals Dive after Opening the Week on a Surge
All base metals declined that day on the LME, and LME nickel was the biggest loser of the day in base metals with a decline of 2.8%.
Why Is Copper Trading High in the Early Hours on September 14?
At 6:20 AM EST on September 14, the COMEX copper futures contract for December delivery was trading at $2.13 per pound—a gain of ~1.2%.
Base Metals Continue to Rise in the London Metal Exchange
The base metals found some relief on January 13, 2016. They carried the same positive sentiment to January 14. All of the base metals rose in the LME.
Copper Dove in July 22 Due to a Stronger Dollar
At 1:15 PM EDT on July 22, major copper producers Freeport-McMoRan (FCX), Billiton (BHP), and Rio Tinto (RIO) fell by ~1.7%, ~1.7%, and ~1.19%, respectively.
Why Goldman and Macquarie Don’t Think Iron Ore Rally Will Last
Goldman Sachs (GS) has warned the Markets that iron ore prices will slump below $40 per ton as supply growth outpaces demand.
Must-know: Why Brazilian iron ore exports fell 9% in August
Brazilian exports show how much volume is shipped out of Brazilian ports to China and the rest of the world. Along with exports from Port Hedland, Australia, this is an important supply side indicator.
China’s Steel Prices Might Have Started Giving Up: More Downside?
One of the most dominant factors driving iron ore’s price rally is rising steel production and the resulting increase in steel prices in China (FXI).
China Moves from Manufacturing to Consumption: Impact on Iron Ore
Over the past few months, we’ve seen that China (MCHI) (ASHR) is transitioning from a manufacturing-based to consumption-based economy.
China’s Steel Production Outlook Pressures Iron Ore Prices
According to the China Iron and Steel Association, China’s 2015 crude steel output could decline by as much as 2%. This estimate is lower than CISA’s March estimate of a 1.1% decline.
World Refined Copper Production Rose 5% in 1Q15
Refined copper production in China rose 9% YoY until March. China was the biggest contributor to the surge in refined copper production.
Why Analysts Have Mixed Views on Iron Ore Prices
Goldman Sachs (GS) is notably still quite bearish on iron ore. The bank cited the recent string of shipment data from Australia to support its view.
Could the OPEC Meeting Have an Impact on Alcoa?
It could be déjà vu for Alcoa (AA) investors after the OPEC meeting on December 4, 2015. Last year’s decision to maintain daily crude output had a negative impact on all commodities.
How Were Copper, Gold, and Silver Trading on Monday?
China’s better-than-expected growth in real estate investments in April supported copper prices on Monday.
Lower Aluminum Prices Dint Alcoa’s 1Q 2015 Earnings
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.
It’s Hard to Be Positive on Long-Term Iron Ore Price Fundamentals
Vale SA will cut the high-cost iron ore production from its Southern and Southeastern systems by 25 million–30 million tons per year. Its 2015 iron ore guidance production is unchanged at 340 million tons.
Understanding S11D’s Impact on Vale’s Earnings Estimates for 2017
Vale’s total volumes should see a significant boost from iron ore volumes as its S11D project starts commercial production.
VGPMX Has Underperfomed the Market
Vanguard Precious Metal and Mining Investment Fund (VGPMX) lags in diversification, as it’s a pure sector fund.
What is Driving the Valuation for Iron Ore Miners?
Valuation multiple The EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple is a widely used relative valuation multiple for capital-intensive industries such as metals and mining. It takes into account a company’s capital structure. By using this multiple, we can compare companies’ valuations. Miners’ EV-to-EBITDA Vale (VALE) has a forward EV-to-EBITDA multiple […]
Civeo impacted by customers’ plans to trim capital spending
Civeo said the demand for its services depends on its customers’ capital spending programs. As a result, it’s one of the first to suffer losses when oil drillers pare back exploration.
Understanding China’s Monthly Record in Steel Production
In April, China’s steel production surpassed the previous monthly record of 72 million achieved in March 2017 by producing 72.78 million tons.
2 Factors That Could Impact Aluminum Premiums In 2015
Aluminum premiums are negotiated between aluminum warehouses and the end buyers. This makes them less susceptible to speculation.
Freeport-McMoRan’s Technical and Fundamental Indicators
Freeport-McMoRan (FCX) closed at $10.54 on September 21. It rose almost 6% from its closing the previous day. The stock has gained 2.4% in September.
How Does Alcoa’s Record Aluminum Deficit Projection Look?
Earlier, Alcoa projected a 1.1 million metric ton deficit for global aluminum markets. It revised down its deficit projection during its 2Q16 conference call.
UK Stock Market Stymies Awaiting a US Rate Hike in September
September 4 saw rises in none of the 109 constituent stocks of the EWU. The Fed’s rate-hike indecision impacted UK investors.
Latest European Economic Data Points to Recovery
The latest European economic data point to a recovery. However, there are still several sectors, such as housing, where demand is weak.
Why Freeport Needs a Friendly Fed Like Never Before
Higher gold prices couldn’t have come at a better time for Freeport. The company is grappling with sagging metal prices in its core copper mining business.
Trouble Ahead For Alcoa? Halcyon Days Of 2014 Could Be Over
Aluminum prices were strong for most of 2014. But OPEC changed all that last fall when it decided to maintain crude oil output levels.
ArcelorMittal’s Key Risks in 2H15: Investor Must-Knows
ArcelorMittal faces certain macro risks. We’ll discuss these risks in this part of our series.
Europe’s Stagnant Industrial Production Impacts ArcelorMittal
The industrial production has been stagnant for several quarters now. The slowdown in Europe also impacts mining giants like Rio Tinto (RIO) and BHP Billiton (BHP).
Why Is the United Kingdom’s Stock Market Buoyant?
The iShares MSCI United Kingdom (EWU) rose 1.1% on Thursday, October 8. On Thursday, 82 stocks rose out of EWU’s 109 constituent stocks.
Understanding Glencore’s Metals and Mining Business
Glencore’s metals and mining segment was the second-biggest contributor to its 1H15 revenues.
BHP Billiton Is Deferring Petroleum Production, but Can It Generate Value?
The key to understanding profitability for BHP’s Petroleum division is looking unit costs of petroleum and its outlook on these going forward.
Will Iron Ore Prices Benefit from China’s Credit Growth Prospects?
China’s aggregate financing stood at ~3.7 trillion Chinese yuan in January 2017, as compared to 1.6 trillion yuan in December 2016.
How Will Cliffs Natural Resources’ Costs Progress in 2017?
In 4Q16, Cliffs’ cash costs of goods sold for APIO was $36.4 per ton, or 8% higher YoY.
Seaborne Iron Ore Prices Look Firm, Supporting Cliffs
For the first time in two years, in November, iron ore prices crossed the $80 per ton level, and YTD gains for the steel-making commodity have reached 82%.
Which Iron Ore Miners Currently Look Undervalued or Overvalued?
Rio Tinto has received a boost due to its recent announcement regarding $5 billion of additional free cash flow generation through productivity improvements.
What Rio Tinto’s Balance Sheet Means for Future Growth
Rio Tinto’s (RIO) net debt at the end of 1H17 was $7.6 billion, compared with $12.9 billion at the end of 1H16 and $9.6 billion at the end of December 2016.
What to Expect from Freeport-McMoRan’s 3Q15 Earnings
Looking at Freeport’s earnings sensitivity to WTI and copper prices, its 3Q15 earnings could take a hit compared to the previous quarter.
Uptrend Continues in Mining Stocks
The uptrend in mining stocks continued on October 2, 2015, as 85 of 109 stocks in the iShares MSCI United Kingdom ETF returned positive gains on the day.
Cliffs’ Asia-Pacific: Will Strong Seaborne Iron Ore Prices Lead to Mine-Extension?
Seaborne iron ore prices have held firm in 2016 and 2017 YTD, despite market participants calling for a downturn.
Key Insights on the Eagle Ford Shale
The Eagle Ford Shale is a gas and oil producing shale formation in south Texas. It extends to northeast Texas and touches the Mexican border. In this series, we’ll look at drilling activity in the region.
Here’s What’s Driving Iron Ore Prices through the Roof
Iron ore prices reached a six-month high of $62.7 per ton on October 26, 2016, bringing the YTD (year-to-date) gains for the commodity to an impressive 46%.
Will Freeport Follow Glencore and Restore Its Dividend?
Freeport-McMoRan and Glencore suffered from the same issues last year. While Glencore restored its dividend, Freeport hasn’t restored its dividend yet.
What Chile’s Mining Strike Means for a Highly Privatized Economy
Chile had been known as the best-managed economy in Latin America—until recently.
China Has A Limited Impact On The Global Aluminum Industry
Bauxite is the main raw material in aluminum production. China lacks high-quality bauxite reserves. Until last year, China was relying on bauxite from Indonesia.
BHP’s Balance Sheet: The 2017 Outlook
BHP’s net debt was $20.1 billion at the end of December 2016, as compared to $26.1 billion on June 30, 2016.
Why October Could Be a Crucial Month for Freeport-McMoRan
In the previous parts of this series, we looked at some of the macro developments that could impact Freeport-McMoRan (FCX) in October.
Inside BHP Billiton’s Iron Ore Price Concerns
Iron ore prices were very strong in 2016 and have remained so year-to-date. Prices increased by more than 80% in 2016.
Don’t Get Too Carried Away with Record Chinese Copper Imports
China is the world’s biggest copper importer.
Freeport-McMoRan’s 1Q18 Earnings: The Word on Wall Street
Freeport-McMoRan, the leading US copper miner, is slated to release its 1Q18 earnings on April 24.
Inside the Strong Iron Ore Shipments in January
In January 2017, 40.3 million tons of iron ore were exported from Port Hedland—an impressive rise of 19.0% YoY.
Will BHP Billiton Borrow to Maintain Progressive Dividends in 2016?
During its AGM on October 22, BHP highlighted its commitment to a strong, stable balance sheet, specifying that it won’t put its “A” credit rating at risk.
How Analysts Are Rating CENX Leading Up to Its 4Q16 Results
In this article, we’ll analyze how analysts are rating Century Aluminum leading up to its 4Q16 earnings.
Do Steel Capacity Cuts in China Bode Well for Iron Ore Miners?
China has been reeling under its overcapacity in the steel industry. In 2016, China planned to cut 45 million tons but wound up cutting 80 million tons.
Why investors should know Cliffs’ outlook
Cliffs Natural Resources (CLF) is mainly an iron ore producer. A small percentage of its revenue comes from metallurgical coal sales.
Copper Fell and Gold Stabilized on July 5
At 6:40 AM EST on July 5, the COMEX Copper futures contract for September delivery was trading at $2.2 per pound—a drop of 0.81%.
What China’s High Iron Ore Imports Suggest
China imported 92 million tons of iron ore in January 2017—a growth of 12.0% YoY and 3.4% month-over-month.
Inside BHP Billiton’s Recent Upgrades and Downgrades
Of the 19 analysts covering BHP Billiton (BHP), four analysts issued “buy” recommendations, while 12 issued “holds,” and three issued “sells.”
How Do Analysts Rate Glencore after 2016 Earnings?
Glencore has come a long way since September 2015 when the stock fell to multiyear lows.
Are China’s Steel Capacity Cuts for Real?
China produced 808.4 million tons of steel in 2016 and 68.9 million tons of steel products in December 2016—a YoY 7.1% rise.
Is There a Disconnect between Chinese Copper Imports and Demand?
Oil and copper are two critical commodities that China is deficient in and must import in large quantities.
Do Lower Chinese Copper Imports Concern Freeport?
In October, China imported 290,000 metric tons of unwrought copper and copper products—a yearly fall of more than 31%. Imports have fallen for seven months.
China’s thermal coal imports—who benefits?
Apart from shipping companies, coal producers (KOL) around the world benefit from China’s coal imports. However, competition in the Pacific market remains steep.
Freeport-McMoRan Looks to Control Costs amid Copper Price Slump
Copper companies have been working to reduce their unit production costs to survive the current slump in copper prices.
Copper’s Spike Could Impact Freeport’s Debt Reduction Plan
During its 4Q15 earnings conference call, Freeport mentioned a debt reduction program to raise $5 billion–$10 billion to shore up its balance sheet.
Freeport-McMoRan’s Debt Reduction Plan: Key Takeaways
During its 4Q15 earnings conference call, Freeport-McMoRan (FCX) mentioned a debt reduction program to raise $5 billion–$10 billion to shore up its balance sheet.