Rio Tinto PLC

It can take almost two pounds of alumina to produce one pound of aluminum. Naturally, changes in alumina prices would impact aluminum’s production cost.

2015 has been tough for miners, especially due to the price rout in the commodities market. The commodities market has fallen about 24.3% since the start of the year.

Alcoa’s value-add company will get a major portion of its revenues from Europe and is thus negatively impacted by a stronger US dollar.

Iron ore forms the biggest chunk of BHP Billiton’s revenues and earnings. For its latest quarter, the company delivered 7% year-over-year growth.

The Bank of England or BoE is targeting an inflation rate at 2.0% in order to attain economic growth in the United Kingdom.

The usage of aluminum in automobiles has been gradually increasing, as it improves vehicle performance, reduces CO2 emissions, and boosts fuel economy.

The weak demand from China is hurting iron ore prices. The supply side, on the other hand, remains quite strong.

Analysis of base metal inventories helps us understand the price and usage trends of the respective base metal, as well the price trends of base metal mining companies.

While major mining companies like Freeport-McMoRan and Glencore are declaring copper production cuts, BHP Billiton says it is reluctant to decrease its copper production.

Peabody Energy’s (BTU) US operations sold 45.7 million tons of thermal coal (KOL) in 3Q15, 5.2% lower than 3Q14’s 48.2 million tons.

Glencore (GLNCY) is a relatively new entrant in the metals and mining industry. The company was founded in 1974.

Market expectations for Cliffs Natural Resources (CLF) are varied. Of the analysts covering Cliffs, one has a “buy” recommendation, eight have a “hold,” and seven have a “sell.”

The third quarter of 2015 hasn’t been good for iron ore equities. Most of them lost significant value during the quarter.

Iron ore prices fell 49% in 2014, which was reflected in the share price performance of major miners. In this series, we’ll discuss the position of various iron ore players on the cost curve relative to iron ore prices.

Iron ore volumes are key to Rio Tinto’s (RIO) iron ore segment’s revenue. The other factor, seaborne iron ore prices, is determined by demand and supply dynamics.

Rio Tinto’s (RIO) underlying EBITDA (earnings before interest, taxes, depreciation, and amortization) was $7.3 billion for 1H15.

Within four trading days of its 1H15 results, Rio Tinto’s stock price rose 3%. This is despite a 1.7% fall in benchmark seaborne iron ore prices.

Iron ore shipments through Port Hedland reached an all-time high of 39.2 million tons in August as compared to 35.3 million tons in July.

Chinese credit easing measures should positively impact the steel industry. This will help iron ore companies like Rio Tinto and BHP Billiton.

Since the end of July, benchmark iron ore prices have been holding steady near $55–$57 per ton. This is despite the continuing slide in other commodities amid China slowdown worries.

Aluminum is the second most widely used metal after steel. Investors have a special liking for aluminum. There are several ways to play the industry.

With the recent news of activist investor Carl Icahn taking an 8.5% stake in the company coupled with Freeport’s lower capital expenditure guidance, the stock has seen a smart up move.

Iron ore costs are key to determining BHP’s iron ore segment’s profitability, which ultimately impacts its stock price and relative performance.

BHP Billiton’s iron ore production for fiscal 2015 was a record 233 million tons, a growth of 14% year-over-year.

BHP Billiton (BHP) (BBL), the world’s largest miner by market capitalization, reported its fiscal 2015 results on August 25. The results were mostly in line with market expectations.

Vale’s (VALE) average CFR (cost and freight) realized price for iron ore fines increased by $3.30 per ton, from $58.20 per metric ton in 1Q15 to $61.50 in 2Q15.

Vale’s (VALE) iron ore production for 1H15 was a record 159.8 million tons, 9.3 million tons higher than 1H14. For 2Q15, production was the second highest on record at 85.3 million tons.

The SPDR Gold Shares ETF (GLD) is the world’s largest ETF. It’s also the highest-traded. Friday’s price for GLD was $104.39.

In this article, we’ll look at Vale’s (VALE) 2Q15 results and why they’re a beat on market expectations. Vale reported adjusted EPS of $0.19, which was 55% above consensus.

Vale S.A. (VALE) reported its 2Q15 results on July 30, 2015. Overall results were a beat on market expectations. However, Vale’s stock price fell 6.5% after Vale announced its results.

Cliffs Natural Resources reported revenues of $498 million for 2Q15, a decline of 33% year-over-year.

Cliffs Natural Resources announced its 2Q15 earnings on July 29, and its results missed market expectations this time. Cliffs offered positive results six out of the last eight times.

A wider contango is generally associated with a short-term oversupply in the market. Aluminum market dynamics took a beating as China’s aluminum exports are reaching alarming levels.

Freeport-McMoRan (FCX) released its 2Q15 earnings on July 23. It reported a net loss of $1.85 billion, which was largely attributable to the $2 billion write-down of its oil and gas assets.

Aluminum prices have been in a downtrend for more than a month.

According to data released on June 22 by the WSA, world crude steel production totaled 139 million tons in May. This is a 2.1% decline year-over-year.

China’s industrial production grew by 6.1% year-over-year in May. Economists were expecting an increase of 6.0%. May’s growth is higher than the 5.9% year-over-year growth in April.

Year-to-date, aluminum prices have lost ~9%, while physical aluminum premiums in the US have lost almost 60%.

Over the last decade, China (FXI) has been the key driver of global commodity trade. This holds true for industrial metals like copper, iron ore, and aluminum.

The iron ore price slide has been particularly pronounced in the last few weeks, as Chinese demand didn’t pick up as expected after the New Year holiday.

As for market sentiment, Cliffs (CLF) seems to be on the receiving end. Most of it is due to the worsening current and future outlook for iron ore prices.

Cliffs Natural Resources’ (CLF) key driver is global demand for the raw materials used to make steel.

Copper is also known as “Dr. Copper,” as analysts see the metal’s prices as a reflection of the global economy’s health.

Cliffs’ (CLF) stock prices fell to a fresh 52-week low of $4.24 on March 19, mostly due to an iron ore supply glut coupled with slowing Chinese demand.

BHP Billiton (BHP) is a leading global diversified resources company and is one of the world’s largest major commodity producers.

Vale’s results were a miss on expectations with a reported adjusted EPS loss of $0.05 per share. This is below the consensus of $0.19 per share.

Vale is the world’s largest producer of iron ore and iron ore pellets. It’s the second largest nickel producer.

Key earnings takeaways from Vale’s results show cost of goods sold amounted to $25.1 billion in 2014, an increase of $819 million from 2013.

China’s manufacturing PMI has been below 50 for two consecutive months. This reflects a slowdown in the Chinese economy and impacts industrial commodities.

It’s important to look at iron ore indicators collectively because they give clues about the direction of iron ore prices.