Shares of most gold miners were up as gold rose again Thursday, with Seabridge Gold (Amex:SA), Newmont Mining (NYSE:NEM), Barrick Gold (NYSE:ABX) and Royal Gold (Nasdaq:RGLD) closing in the positive.
Gold for June delivery rose $16.80 to settle at $1,472.40 an ounce on the Comex division of the New York Mercantile Exchange. Silver climbed $1.427, or 3.6 percent, to $41.664 an ounce.
Spot gold was up 1.4 percent to $1,474.30 an ounce, closing in on its record $1,476.21 set on Monday.
The collapsing U.S. dollar, tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, increasing inflation and consequences of the Japanese earthquake are just some of the negative catalysts affecting the price movements.
The U.S. dollar was close to session lows, resulting in a further impetus to gold. The U.S. currency traded as low as 74.617, its lowest level since December 2009.
In base metals trading, May copper dropped 1.05 cents to settle at $4.284 a pound, July platinum increased $18.40 to $1,795.60 an ounce and June palladium was up $8.95 to $774.25 an ounce. May copper fell 1.05 cents to settle at $4.284 a pound
Royal Gold closed Thursday at $53.44, gaining $0.67, or 1.27 percent. Barrick Gold closed at $53.42, rising $1.26, or 2.42 percent. Newmont Mining ended the session at $57.53, up $1.21, or 2.15 percent. Seabridge Gold closed at $33.01, rising $0.69, or 2.13 percent.
Showing posts with label Copper. Show all posts
Showing posts with label Copper. Show all posts
Friday, April 15, 2011
NovaGold (NG) (IVN) (HMY) (AU) Trade Mixed as Gold, Silver Rise Again
Shares of most gold miners were up as gold soared again Thursday, although NovaGold Resources Inc. (AMEX:NG), Ivanhoe Mines Ltd. (NYSE:IVN), Harmony Gold Mining (NYSE:HMY) and AngloGold Ashanti (NYSE:AU) were trading mixed.
Gold for June delivery climbed $16.80 to settle at $1,472.40 an ounce on the Comex division of the New York Mercantile Exchange. Silver jumped $1.427, or 3.6 percent, to $41.664 an ounce.
Spot gold was up 1.4 per cent to $1,474.30 an ounce, closing in on its record $1,476.21 set on Monday.
The collapsing U.S. dollar, tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, increasing inflation and consequences of the Japanese earthquake are just some of the negative catalysts affecting the price movements.
The U.S. dollar was close to session lows, resulting in a further impetus to gold. The U.S. currency traded as low as 74.617, its lowest level since December 2009.
In base metals trading, May copper dropped 1.05 cents to settle at $4.284 a pound, July platinum increased $18.40 to $1,795.60 an ounce and June palladium was up $8.95 to $774.25 an ounce. May copper fell 1.05 cents to settle at $4.284 a pound
AngloGold Ashanti closed Thursday at $49.26, gaining $0.35, or 0.72 percent. Harmony Gold Mining closed at $14.90, up $0.07, or 0.47 percent. Ivanhoe Mines Ltd. ended the session at $26.38, falling $0.30, or 1.12 percent. NovaGold Resources Inc. closed at $13.22, rising $0.36, or 2.80 percent.
Gold for June delivery climbed $16.80 to settle at $1,472.40 an ounce on the Comex division of the New York Mercantile Exchange. Silver jumped $1.427, or 3.6 percent, to $41.664 an ounce.
Spot gold was up 1.4 per cent to $1,474.30 an ounce, closing in on its record $1,476.21 set on Monday.
The collapsing U.S. dollar, tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, increasing inflation and consequences of the Japanese earthquake are just some of the negative catalysts affecting the price movements.
The U.S. dollar was close to session lows, resulting in a further impetus to gold. The U.S. currency traded as low as 74.617, its lowest level since December 2009.
In base metals trading, May copper dropped 1.05 cents to settle at $4.284 a pound, July platinum increased $18.40 to $1,795.60 an ounce and June palladium was up $8.95 to $774.25 an ounce. May copper fell 1.05 cents to settle at $4.284 a pound
AngloGold Ashanti closed Thursday at $49.26, gaining $0.35, or 0.72 percent. Harmony Gold Mining closed at $14.90, up $0.07, or 0.47 percent. Ivanhoe Mines Ltd. ended the session at $26.38, falling $0.30, or 1.12 percent. NovaGold Resources Inc. closed at $13.22, rising $0.36, or 2.80 percent.
Thursday, April 14, 2011
Barrick (ABX) (IVN) (AUY) (IAG) Down as Gold, Silver End Slightly Up
Gold and silver prices were up moderately Wednesday which had gold miners like Barrick Gold (NYSE:ABX), Ivanhoe Mines Ltd. (NYSE:IVN), Yamana Gold (NYSE:AUY) and IAMGOLD Corporation (NYSE:IAG) slightly down on the day, as most the precious metals also dropped.
On Wednesday gold prices closed at $1455.60 an ounce. The Silver price for the May contract was higher by .43 percent at 40.24 an ounce.
The collapsing U.S. dollar continues to be a big factor, although it gained in strength near the end of trading Wednesday. Other factors are tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, deepening food and fuel inflation and the consequences of the Japanese earthquake in the auto and tech sectors, among others.
July platinum added $2.90 to $1,777.20 a troy ounce, but June palladium fell $4.80 to $765.30 a troy ounce.
Among base metals, May copper was down 9 cents to $4.30 a pound in New York trade, while three-month contracts were $115 lower to $9,515 a ton on the London Metal Exchange after stockpiles in LME-monitored warehouses added another 3,225 tons throughout the day.
Tin was also down in London trade, falling $300 to $32,250 a ton, while nickel dropped $450 to $26,250 a ton.
IAMGOLD Corporation Wednesday at $21.50, falling $0.43, or 1.96 percent. Yamana Gold closed at $12.48, down $0.12, or 0.95 percent. Ivanhoe Mines Ltd. closed at $26.68, dropping $0.22, or 0.82 percent. Barrick Gold ended the day at $52.16, down $0.18, or 0.34 percent.
On Wednesday gold prices closed at $1455.60 an ounce. The Silver price for the May contract was higher by .43 percent at 40.24 an ounce.
The collapsing U.S. dollar continues to be a big factor, although it gained in strength near the end of trading Wednesday. Other factors are tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, deepening food and fuel inflation and the consequences of the Japanese earthquake in the auto and tech sectors, among others.
July platinum added $2.90 to $1,777.20 a troy ounce, but June palladium fell $4.80 to $765.30 a troy ounce.
Among base metals, May copper was down 9 cents to $4.30 a pound in New York trade, while three-month contracts were $115 lower to $9,515 a ton on the London Metal Exchange after stockpiles in LME-monitored warehouses added another 3,225 tons throughout the day.
Tin was also down in London trade, falling $300 to $32,250 a ton, while nickel dropped $450 to $26,250 a ton.
IAMGOLD Corporation Wednesday at $21.50, falling $0.43, or 1.96 percent. Yamana Gold closed at $12.48, down $0.12, or 0.95 percent. Ivanhoe Mines Ltd. closed at $26.68, dropping $0.22, or 0.82 percent. Barrick Gold ended the day at $52.16, down $0.18, or 0.34 percent.
Kinross (KGC) (AEM) (AU) (NEM) Down as Gold, Silver End Slightly Up
Gold and silver prices were up moderately Wednesday which had gold miners like Agnico-Eagle (NYSE:AEM), Kinross Gold Corp (NYSE:KGC), AngloGold Ashanti (NYSE:AU) and Newmont Mining (NYSE:NEM) slightly down on the day, as most the precious metals also dropped.
On Wednesday gold prices closed at $1455.60 an ounce. The Silver price for the May contract was higher by .43 percent at 40.24 an ounce.
The collapsing U.S. dollar continues to be a big factor, although it gained in strength near the end of trading Wednesday. Other factors are tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, deepening food and fuel inflation and the consequences of the Japanese earthquake in the auto and tech sectors, among others.
July platinum added $2.90 to $1,777.20 a troy ounce, but June palladium fell $4.80 to $765.30 a troy ounce.
Among base metals, May copper was down 9 cents to $4.30 a pound in New York trade, while three-month contracts were $115 lower to $9,515 a ton on the London Metal Exchange after stockpiles in LME-monitored warehouses added another 3,225 tons throughout the day.
Tin was also down in London trade, falling $300 to $32,250 a ton, while nickel dropped $450 to $26,250 a ton.
Newmont Mining closed Wednesday at $56.32, falling $0.92, or 1.61 percent. Kinross Gold Corp. closed at $15.53, down $0.13, or 0.83 percent. Agnico-Eagle closed at $64.75, dropping $0.38, or 0.58 percent. AngloGold Ashanti ended the day at $48.91, down $0.02, or 0.04 percent.
On Wednesday gold prices closed at $1455.60 an ounce. The Silver price for the May contract was higher by .43 percent at 40.24 an ounce.
The collapsing U.S. dollar continues to be a big factor, although it gained in strength near the end of trading Wednesday. Other factors are tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, deepening food and fuel inflation and the consequences of the Japanese earthquake in the auto and tech sectors, among others.
July platinum added $2.90 to $1,777.20 a troy ounce, but June palladium fell $4.80 to $765.30 a troy ounce.
Among base metals, May copper was down 9 cents to $4.30 a pound in New York trade, while three-month contracts were $115 lower to $9,515 a ton on the London Metal Exchange after stockpiles in LME-monitored warehouses added another 3,225 tons throughout the day.
Tin was also down in London trade, falling $300 to $32,250 a ton, while nickel dropped $450 to $26,250 a ton.
Newmont Mining closed Wednesday at $56.32, falling $0.92, or 1.61 percent. Kinross Gold Corp. closed at $15.53, down $0.13, or 0.83 percent. Agnico-Eagle closed at $64.75, dropping $0.38, or 0.58 percent. AngloGold Ashanti ended the day at $48.91, down $0.02, or 0.04 percent.
Thursday, March 24, 2011
Southern Copper (SCCO), Newmont (NEM) Rise on Copper, Gold Exposure
Based on their exposure to copper and gold, Southern Copper (NYSE:SCCO) and Newmont Mining (NYSE:NEM) could be in good position to benefit from the price of both going up, as well as demand.
Copper and gold prices jumped on anticipated demand, and in the case of gold, safe haven status, as investors continue to be jittery on global events and economic uncertainty.
For copper, the demand from China and India, along with the emerging demand from Japan as it looks to rebuild after the earthquake, gives a strong impetus for prices to remain strong going forward.
Gold is also expected to continue to rise, and will get a boost from growing inflation as investors move to protect their wealth.
Southern Copper closed Wednesday $41.55, gaining $1.37, or 3.41 percent. Newmont Mining closed at $54.83, $1.66, or 3.12 percent.
Copper and gold prices jumped on anticipated demand, and in the case of gold, safe haven status, as investors continue to be jittery on global events and economic uncertainty.
For copper, the demand from China and India, along with the emerging demand from Japan as it looks to rebuild after the earthquake, gives a strong impetus for prices to remain strong going forward.
Gold is also expected to continue to rise, and will get a boost from growing inflation as investors move to protect their wealth.
Southern Copper closed Wednesday $41.55, gaining $1.37, or 3.41 percent. Newmont Mining closed at $54.83, $1.66, or 3.12 percent.
Freeport (FCX) Preparing for Big Acquisition?
Comments from Freeport-McMoRan Copper & Gold (NYSE:FCX) Chief Executive Officer Richard Adkerson, saying the company's balance sheet is strong enough to handle a large acquisition, resulted in the share price of the diversified miner to soar.
The implications are Adkerson is looking for such an acquisition to help boost the revenue and earnings of the company, as its size makes it hard to make acquisitions which will have a significant impact on the bottom line.
Also of importance is the large amount of copper the company has, which will be a major factor in the rebuilding of Japan, where copper and other metals are expected to be in big demand for years to come, even more than when China and India were the major factors.
It wouldn't be surprising to hear of a major bid for a significant company in the next several months, as the long-term supply and demand situation has just gotten better with the addition of Japanese demand, and it should extend the commodity bull market out for several years beyond the already hefty projections.
Freeport has a market cap of almost $52 billion.
Freeport closed Wednesday at $54.88, gaining $2.60, or 4.97 percent.
The implications are Adkerson is looking for such an acquisition to help boost the revenue and earnings of the company, as its size makes it hard to make acquisitions which will have a significant impact on the bottom line.
Also of importance is the large amount of copper the company has, which will be a major factor in the rebuilding of Japan, where copper and other metals are expected to be in big demand for years to come, even more than when China and India were the major factors.
It wouldn't be surprising to hear of a major bid for a significant company in the next several months, as the long-term supply and demand situation has just gotten better with the addition of Japanese demand, and it should extend the commodity bull market out for several years beyond the already hefty projections.
Freeport has a market cap of almost $52 billion.
Freeport closed Wednesday at $54.88, gaining $2.60, or 4.97 percent.
Alcoa (AA) Rebounds, Leads Dow
Although struggling since highs hit in February, Alcoa (NYSE:AA) appears to be back on track again, thanks largely to the expected boost in aluminum demand from the Japan earthquake and tsunami as the country prepares to rebuild.
Alcoa let the Dow up on Wednesday, as some commodity prices continue to rise in anticipation of the orders mining companies will get.
Commodities like copper, iron ore, steel and aluminum are expected to generate strong orders in the short and long term.
Alcoa closed Wednesday at $16.95, gaining $0.50, or 3.04 percent.
Alcoa let the Dow up on Wednesday, as some commodity prices continue to rise in anticipation of the orders mining companies will get.
Commodities like copper, iron ore, steel and aluminum are expected to generate strong orders in the short and long term.
Alcoa closed Wednesday at $16.95, gaining $0.50, or 3.04 percent.
Monday, March 21, 2011
Taseko (TGB) Increasing Production at Gibraltar
Saying increased production has helped the company perform strongly, Taseko Mines (AMEX:TGB) said it is going to boost production at its flagship Gibraltar Mine to 180,000 pounds of copper and one million pounds of molybdenum annually.
In 2010, the miner said copper production rose by 30 percent and molybdenum production by 50 percent.
Russell Hallbauer, Taseko CEO, said, "As announced in February, we are moving forward with a further capacity increase at Gibraltar. This $325 million investment will allow us to leverage the strong copper price environment and further enhance Taseko's cash flow generating ability."
"Strong financial performance in 2010 was driven by improved copper production and the rising copper price environment. ...These improvements are the result of ongoing investments in mine and concentrate equipment," he added.
Taseko produced 92.3 million pounds of copper in 2010 and 941,000 pounds of molybdenum.
Taseko closed Friday at $5.94, up $0.11, or 1.89 percent.
In 2010, the miner said copper production rose by 30 percent and molybdenum production by 50 percent.
Russell Hallbauer, Taseko CEO, said, "As announced in February, we are moving forward with a further capacity increase at Gibraltar. This $325 million investment will allow us to leverage the strong copper price environment and further enhance Taseko's cash flow generating ability."
"Strong financial performance in 2010 was driven by improved copper production and the rising copper price environment. ...These improvements are the result of ongoing investments in mine and concentrate equipment," he added.
Taseko produced 92.3 million pounds of copper in 2010 and 941,000 pounds of molybdenum.
Taseko closed Friday at $5.94, up $0.11, or 1.89 percent.
Thursday, March 17, 2011
Freeport (FCX): Mitsubishi Smelter Won't Affect Operations
Freeport-McMoRan Copper & Gold (NYSE:FCX) does not anticipate any major effect on shipments after announcement that Japan's Mitsubishi Materials will halt operations at a copper smelter following the horrific earthquake and tsunami.
Spokesman Eric Kinneberg said, “We have been notified that Mitsubishi has declared a force majeure with respect to deliveries to the Onahama smelter.
“However, we do not anticipate any significant impacts as only a small portion of Freeport concentrate sales were placed with this smelter.”
Freeport is the largest publicly traded copper producer, with mines in the US, Indonesia, Chile, Peru and the Democratic Republic of Congo.
Freeport closed Wednesday at $50.29, down $1.14, or 2.22 percent.
Source
Spokesman Eric Kinneberg said, “We have been notified that Mitsubishi has declared a force majeure with respect to deliveries to the Onahama smelter.
“However, we do not anticipate any significant impacts as only a small portion of Freeport concentrate sales were placed with this smelter.”
Freeport is the largest publicly traded copper producer, with mines in the US, Indonesia, Chile, Peru and the Democratic Republic of Congo.
Freeport closed Wednesday at $50.29, down $1.14, or 2.22 percent.
Source
Wednesday, March 9, 2011
Teck Resources (TCK) Sells Stake in Carrapateena for $134 Million
Teck Resources (NYSE:TCK) announced it'll be selling its 34 percent stake the Carrapateena deposit, located in Australia, for $134 million. The stake is being acquired by an affiliate of OZ Minerals Ltd.
Carrapateena is among the largest undeveloped copper and gold deposits in Australia.
There is an estimated 4.4 million tons of copper, 6 million ounces of gold, and 225 million pounds of uranium, along with some rare earths and haematite iron ore in the resource.
BHP Billiton (NYSE:BHP) has its Dam mine in the same geological structure as Carrapateena is located in.
Australia's privately held RMG Services has a 58 percent stake in the project.
Teck could also receive up to $25 million in the deal based on certain production milestones. They've spend about $30.3 million exploring the site over the last six years.
The deal should close in the second quarter.
Teck Resources closed in New York Tuesday at $54.23, gaining $0.21, or 0.39 percent.
Carrapateena is among the largest undeveloped copper and gold deposits in Australia.
There is an estimated 4.4 million tons of copper, 6 million ounces of gold, and 225 million pounds of uranium, along with some rare earths and haematite iron ore in the resource.
BHP Billiton (NYSE:BHP) has its Dam mine in the same geological structure as Carrapateena is located in.
Australia's privately held RMG Services has a 58 percent stake in the project.
Teck could also receive up to $25 million in the deal based on certain production milestones. They've spend about $30.3 million exploring the site over the last six years.
The deal should close in the second quarter.
Teck Resources closed in New York Tuesday at $54.23, gaining $0.21, or 0.39 percent.
Monday, March 7, 2011
Ivanhoe (IVN) Says 'Hi Ho Silver' at Oyu Tolgoi
While most investors know about the copper and gold reserves at Ivanhoe Mines' (NYSE:IVN) Oyu Tolgoi project in Mongolia, it extent of the silver reserves at the mine haven't been talked about much, until now.
According to Ivanhoe Chief Executive Robert Friedland, the project should produce an average of 3 million ounces of silver a year at the mine.
Friedland said, "The buoyant global silver market has fueled the interests of investors and has prompted us to more widely circulate the projections for silver production.
"Oyu Tolgoi will rank as a very substantial silver producer when commercial production begins in 2013."
Over the 27-year life of the mine, the miner said Oyu Tolgoi should produce about 78 million ounces of silver.
The company has said in the past that annual production of copper willl come in at 1.2 billion pounds, and gold at 650,000 ounces. Also being mined will be molybdenum.
Ivanhoe owns a 66 percent stake in the project, while the Mongolian government owns the rest. Rio Tinto (NYSE:RIO) has a 48.4 percent stake in Ivanhoe.
According to Ivanhoe Chief Executive Robert Friedland, the project should produce an average of 3 million ounces of silver a year at the mine.
Friedland said, "The buoyant global silver market has fueled the interests of investors and has prompted us to more widely circulate the projections for silver production.
"Oyu Tolgoi will rank as a very substantial silver producer when commercial production begins in 2013."
Over the 27-year life of the mine, the miner said Oyu Tolgoi should produce about 78 million ounces of silver.
The company has said in the past that annual production of copper willl come in at 1.2 billion pounds, and gold at 650,000 ounces. Also being mined will be molybdenum.
Ivanhoe owns a 66 percent stake in the project, while the Mongolian government owns the rest. Rio Tinto (NYSE:RIO) has a 48.4 percent stake in Ivanhoe.
Monday, February 14, 2011
Teck Resources (NYSE:TCK) Led by Red Dog, Zinc in 2011?
Most investors know the value Teck Resources (NYSE:TCK) is getting from its copper and metallurgical coal assets, but they are about to come on strongly with its zinc asset via its Red Dog mine, where production is ready to crank up.
Zinc for the most part is used to galvanize iron and steel. Teck's metallurgical coal goes primarily to Chinese steel mills and copper of course to electrical and housing.
Another benefit of the Red Dog mine is it has lead as a byproduct, which is used in infrastructure projects, tin substitute in soldering, and car batteries.
Those charting tin also see a head and shoulders pattern which suggest it's ready to breakout sometime soon.
Teck Resources closed Friday at $58.81, gaining $0.13, or 0.22 percent.
Zinc for the most part is used to galvanize iron and steel. Teck's metallurgical coal goes primarily to Chinese steel mills and copper of course to electrical and housing.
Another benefit of the Red Dog mine is it has lead as a byproduct, which is used in infrastructure projects, tin substitute in soldering, and car batteries.
Those charting tin also see a head and shoulders pattern which suggest it's ready to breakout sometime soon.
Teck Resources closed Friday at $58.81, gaining $0.13, or 0.22 percent.
Wednesday, February 9, 2011
Teck Resources (NYSE:TCK), Freeport (NYSE:FCX), BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RIO) All Close Up as Commodities Jump
For the most part individual miners enjoyed a more profitable day than diversified miners, but that didn't stop Teck Resources (NYSE:TCK), Freeport-McMoran (NYSE:FCX), BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) from finishing positive Tuesday.
Most industrial and precious metals rose Tuesday, with lead being the one exception to the rule.
Gold and silver both pushed up nicely, and copper, aluminum, nickel, tin and zinc were all up for the day.
Teck Resources closed Tuesday at $63.56, gaining $0.76, or 1.21. percent. Freeport-McMorRan closed at $55.64, up $0.02, or 0.04 percent. BHP closed at $95.69, rising $0.54, or 0.57 percent. Rio Tinto surged to $76.63, gaining $2.46, or 3.32 percent.
Most industrial and precious metals rose Tuesday, with lead being the one exception to the rule.
Gold and silver both pushed up nicely, and copper, aluminum, nickel, tin and zinc were all up for the day.
Teck Resources closed Tuesday at $63.56, gaining $0.76, or 1.21. percent. Freeport-McMorRan closed at $55.64, up $0.02, or 0.04 percent. BHP closed at $95.69, rising $0.54, or 0.57 percent. Rio Tinto surged to $76.63, gaining $2.46, or 3.32 percent.
Friday, January 14, 2011
Alcoa (NYSE:AA), Reliance Steel & Aluminum (NYSE:RS) Boosted by Dahlman Rose
Alcoa (NYSE:AA) and Reliance Steel & Aluminum (NYSE:RS) were both upgraded by Dahlman Rose Friday, boosting them both from "Hold" to "Buy."
Concerning Alcoa, Dahlman said they see the company's downstream business improving, along with a stronger aluminum price outlook. Also noted was the alumina business, which they see becoming more profitable in 2011.
For Reliance, they see them benefiting from the broader U.S. domestic steel market continuing to improve. The construction market is expected to start to move within an estimated 9 to 12 months, suggesting companies may start to spend on steel and other materials before that. That could help Reliance through 2012 if that's how it works out.
Along with the steel industry, Dahlman also likes iron ore, copper, aluminum and molybdenum going forward.
Alcoa was trading at $16.01, gaining $0.26, or 1.68 percent, as of 3:03 PM EST. Reliance Steel was trading at $53.24, up $0.12, or 0.23 percent.
Concerning Alcoa, Dahlman said they see the company's downstream business improving, along with a stronger aluminum price outlook. Also noted was the alumina business, which they see becoming more profitable in 2011.
For Reliance, they see them benefiting from the broader U.S. domestic steel market continuing to improve. The construction market is expected to start to move within an estimated 9 to 12 months, suggesting companies may start to spend on steel and other materials before that. That could help Reliance through 2012 if that's how it works out.
Along with the steel industry, Dahlman also likes iron ore, copper, aluminum and molybdenum going forward.
Alcoa was trading at $16.01, gaining $0.26, or 1.68 percent, as of 3:03 PM EST. Reliance Steel was trading at $53.24, up $0.12, or 0.23 percent.
Wednesday, December 8, 2010
Freeport (NYSE:FCX), BHP (NYSE:BHP), Rio (NYSE:RIO) Up on Commodities Strength
Diversified major miners like Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) all ended Tuesday's session positive, as the broader commodity market, including copper, was able to overcome the relatively soft price of gold, which plunged on the day.
A number of commodities, including copper, are going to struggle to meet demand in 2011, and that bodes well for the commodity market, even if some of the individual commodities aren't in the same place.
Overall, it appears commodities are segmenting, and investors will have to pay closer attention to individual demand and weighing, rather than considering them as a whole, which has been working during the bull market.
Freeport closed Tuesday at $110.63, up $0.73, or 0.66 percent. BHP closed at $88.85, up $0.12, or 0.14. Rio reached $71.02, increasing $0.71, or 1.01 percent.
A number of commodities, including copper, are going to struggle to meet demand in 2011, and that bodes well for the commodity market, even if some of the individual commodities aren't in the same place.
Overall, it appears commodities are segmenting, and investors will have to pay closer attention to individual demand and weighing, rather than considering them as a whole, which has been working during the bull market.
Freeport closed Tuesday at $110.63, up $0.73, or 0.66 percent. BHP closed at $88.85, up $0.12, or 0.14. Rio reached $71.02, increasing $0.71, or 1.01 percent.
JPMorgan (NYSE:JPM) Mystery Buyer of $1 Billion of Copper
Speculation has finally ended on who the secret buyer of over $1 billion in copper has been, as JPMorgan (NYSE:JPM) was identified as the entity making the acquisitions.
The amount of copper bought by JPMorgan represents over 50 percent of all the metal lodged in official London warehouses.
Similar to silver and the Hunt brothers decades ago, it generated concerns someone was attempting to corner the copper market, creating a shortage and driving up the prices even more than they're already set to rise.
Finding out the buyer was JPMorgan caused some of the tension in the market to ease, as the copper was acquired on behalf of clients, so in reality they don't own the metal directly. Nonetheless, copper is still in the hands of one institution and its clients, giving them pricing power in the market if they continue to hold onto it.
In 2011, copper demand will be stronger than supply by just under 500,000 metric tons, which will continue to drive the price of the metal up.
Since the market became aware of large amounts of copper being acquired, it has risen by 7.2 percent on the LME since November 23. Copper in New York since that same date is up 8.1 percent.
Short term copper price are experiencing "backwardation" at this time, which is where copper needed for immediate delivery is more expensive than copper to be delivered in several months. This implies tight copper supply in the short term.
LME says it holds close to 350,000 tons of copper now, down from the 555,000 it held as of February.
The amount of copper bought by JPMorgan represents over 50 percent of all the metal lodged in official London warehouses.
Similar to silver and the Hunt brothers decades ago, it generated concerns someone was attempting to corner the copper market, creating a shortage and driving up the prices even more than they're already set to rise.
Finding out the buyer was JPMorgan caused some of the tension in the market to ease, as the copper was acquired on behalf of clients, so in reality they don't own the metal directly. Nonetheless, copper is still in the hands of one institution and its clients, giving them pricing power in the market if they continue to hold onto it.
In 2011, copper demand will be stronger than supply by just under 500,000 metric tons, which will continue to drive the price of the metal up.
Since the market became aware of large amounts of copper being acquired, it has risen by 7.2 percent on the LME since November 23. Copper in New York since that same date is up 8.1 percent.
Short term copper price are experiencing "backwardation" at this time, which is where copper needed for immediate delivery is more expensive than copper to be delivered in several months. This implies tight copper supply in the short term.
LME says it holds close to 350,000 tons of copper now, down from the 555,000 it held as of February.
Monday, December 6, 2010
Vale (NYSE:VALE) Expanding Copper Production
In a move to diversify its holdings and profit from rising copper prices, Vale (NYSE:VALE) announced they're increasing copper production by about 45 percent over the next five years, expected to reach 1 million tons annually by 2015.
Vale is the largest producer of iron ore in the world at this time.
Tito Martins, Vale's Executive Director for Base Metals said, "Diversification is part of Vale's strategy. Copper, given current market trends, appears to be an extremely attractive investment."
Production goals before the decision were to extract 691 tons of copper in 2015.
In 2011, copper production estimates for Vale are to produce about 332,000 tons. In 2010 they produced 131,000 tons of copper over the first nine months of the year. That underperformed because of a long strike in Canada.
In the third quarter of 2010, copper production only accounted for less than 3 percent of the revenue for Vale, giving them a lot of room to grow in the years ahead, assuming it'll be profitable and copper retains price support.
Iron ore on the other hand accounted for about 60 percent of revenue in the third quarter.
Vale is also looking to the fertilizer sector as their other main focus for growth.
That is also expected to climb in revenue because of the expectations food prices will continue to rise, increasing margins and providing farmers with more capital to invest.
Vale is the largest producer of iron ore in the world at this time.
Tito Martins, Vale's Executive Director for Base Metals said, "Diversification is part of Vale's strategy. Copper, given current market trends, appears to be an extremely attractive investment."
Production goals before the decision were to extract 691 tons of copper in 2015.
In 2011, copper production estimates for Vale are to produce about 332,000 tons. In 2010 they produced 131,000 tons of copper over the first nine months of the year. That underperformed because of a long strike in Canada.
In the third quarter of 2010, copper production only accounted for less than 3 percent of the revenue for Vale, giving them a lot of room to grow in the years ahead, assuming it'll be profitable and copper retains price support.
Iron ore on the other hand accounted for about 60 percent of revenue in the third quarter.
Vale is also looking to the fertilizer sector as their other main focus for growth.
That is also expected to climb in revenue because of the expectations food prices will continue to rise, increasing margins and providing farmers with more capital to invest.
Monday, November 29, 2010
Freeport's (NYSE:FCX) Debt, Margins, and Earnings
Freeport-McMoRan has exploded in share price since it bottomed out at $16.80 a share on December 1, 2008, and it's worth looking briefly at their current situation as it relates to debt, margins and earnings, which may challenge the company going forward.
The one thing to keep in mind concerning Freeport and all companies with heavy exposure to the right commodities, is rising prices can forgive a lot of weaknesses, but weaknesses still affect the bottom line of a company, and performances can be better even in the best of times.
Higher commodity prices have been the norm recently, but macroeconomic circumstances are dividing up the sector some, with particular commodities sure to continue doing well, but others falling by the wayside or reaching top price levels.
As far as Freeport or any commodity company, one must continue to closely watch debt levels and their costs, operational costs, margins, and that ultimately all leads to earnings.
Over the last several years Freeport has taken on more debt even as their equity increased. The problem is the debt-to-equity ratio has also increased, which isn't a good thing for the company. That means even in a bull commodity market their debt is increasing at higher levels. This doesn't mean Freeport is in danger, but the trend isn't good. Their debt-to-equity is a little over 41 percent at this time.
This has resulted in the gross margins of Freeport being under pressure, which is something that needs to be closely watched over the next year.
Other situations to watch is the China story as it relates to commodities, as they're in the midst of battling an inflation challenge, and that will probably result in slower growth and lower imports. That could cause lower sales for companies like Freeport, although China will still grow strongly, but not at the rate they have in the recent past.
Freeport can't do anything about the macroeconomic situation, but the things they can control like debt and operational costs need to be watched closely, along with the price trends of specific commodities.
It seems the period where the majority of commodities could be counted on to rise on general demand are over, and specific commodities will have to be watched in order to determine whether or not commodity prices will overcome elements which could result in lower margins and earnings.
For Freeport, they primarily mine copper, gold, silver, molybdenum and cobalt. Of those, copper is probably the most important to watch, as gold and silver in the current economic environment could help them overcome higher debt and costs, as prices will continue rising for some time.
Copper isn't necessarily guaranteed that anymore because of the probably cutbacks in places like China, and the ongoing weakness in building of new homes in the West, including the United States.
The one thing to keep in mind concerning Freeport and all companies with heavy exposure to the right commodities, is rising prices can forgive a lot of weaknesses, but weaknesses still affect the bottom line of a company, and performances can be better even in the best of times.
Higher commodity prices have been the norm recently, but macroeconomic circumstances are dividing up the sector some, with particular commodities sure to continue doing well, but others falling by the wayside or reaching top price levels.
As far as Freeport or any commodity company, one must continue to closely watch debt levels and their costs, operational costs, margins, and that ultimately all leads to earnings.
Over the last several years Freeport has taken on more debt even as their equity increased. The problem is the debt-to-equity ratio has also increased, which isn't a good thing for the company. That means even in a bull commodity market their debt is increasing at higher levels. This doesn't mean Freeport is in danger, but the trend isn't good. Their debt-to-equity is a little over 41 percent at this time.
This has resulted in the gross margins of Freeport being under pressure, which is something that needs to be closely watched over the next year.
Other situations to watch is the China story as it relates to commodities, as they're in the midst of battling an inflation challenge, and that will probably result in slower growth and lower imports. That could cause lower sales for companies like Freeport, although China will still grow strongly, but not at the rate they have in the recent past.
Freeport can't do anything about the macroeconomic situation, but the things they can control like debt and operational costs need to be watched closely, along with the price trends of specific commodities.
It seems the period where the majority of commodities could be counted on to rise on general demand are over, and specific commodities will have to be watched in order to determine whether or not commodity prices will overcome elements which could result in lower margins and earnings.
For Freeport, they primarily mine copper, gold, silver, molybdenum and cobalt. Of those, copper is probably the most important to watch, as gold and silver in the current economic environment could help them overcome higher debt and costs, as prices will continue rising for some time.
Copper isn't necessarily guaranteed that anymore because of the probably cutbacks in places like China, and the ongoing weakness in building of new homes in the West, including the United States.
Friday, November 12, 2010
Taseko Mines (NYSE:TGB) Now a Value Story says TD Newcrest
Taseko Mines (NYSE:TGB) has taken a big hit since the announcement concerning the decision to not allow them to work their Prosperity property.
Even so, TD Newcrest actually upgraded Taseko from "Reduce" to "Hold."
"We are maintaining our target price and increasing our rating to HOLD from Reduce following share price weakness on the negative Prosperity permitting decision. The potential return to our target is 6.6%. We believe Taseko shares are fairly valued at these levels and that Taseko has become a value story rather than a growth story," said TD.
The copper and molybdenum miner announced it earned $1.4 million or a penny a share in its latest quarter, up from a loss of $2.4 million or one cent a share in the same quarter last year. On the negative side, revenue dropped to $37.5 million from $40.4 million.
Taseko does have some room to move, as it has about $200 million in cash, and is growing it on a quarterly basis from their Gibraltar mine.
Taseko closed Thursday at $4.66, gaining $0.01, or 0.22 percent. TD Newcrest has a price target of C$5.00 on them.
Even so, TD Newcrest actually upgraded Taseko from "Reduce" to "Hold."
"We are maintaining our target price and increasing our rating to HOLD from Reduce following share price weakness on the negative Prosperity permitting decision. The potential return to our target is 6.6%. We believe Taseko shares are fairly valued at these levels and that Taseko has become a value story rather than a growth story," said TD.
The copper and molybdenum miner announced it earned $1.4 million or a penny a share in its latest quarter, up from a loss of $2.4 million or one cent a share in the same quarter last year. On the negative side, revenue dropped to $37.5 million from $40.4 million.
Taseko does have some room to move, as it has about $200 million in cash, and is growing it on a quarterly basis from their Gibraltar mine.
Taseko closed Thursday at $4.66, gaining $0.01, or 0.22 percent. TD Newcrest has a price target of C$5.00 on them.
Wednesday, November 10, 2010
Morgan Stanley (NYSE:MS) Sees Base Metals Surge Led by Copper
Morgan Stanley (NYSE:MS) sees base metals rallying in 2011, led by copper.
Expectations are consumption will increase at a time when supply is lower and demand rising.
Peter Richardson, chief metals economist at Morgan Stanley Australia Ltd., said, "There is a fundamental aspect to this rally in addition to what's happening to the U.S. dollar. I rank copper first."
According to the International Copper Study Group, refined-copper production in 2011 will fall behind demand, the first such occurrence since 2007.
With potential shortages not priced fully into copper at this time and the move by Ben Bernanke and the Federal Reserve to implement another round of inflating, or quantitative easing, copper and other base metals will continue to rise, again, led by copper.
Expectations are consumption will increase at a time when supply is lower and demand rising.
Peter Richardson, chief metals economist at Morgan Stanley Australia Ltd., said, "There is a fundamental aspect to this rally in addition to what's happening to the U.S. dollar. I rank copper first."
According to the International Copper Study Group, refined-copper production in 2011 will fall behind demand, the first such occurrence since 2007.
With potential shortages not priced fully into copper at this time and the move by Ben Bernanke and the Federal Reserve to implement another round of inflating, or quantitative easing, copper and other base metals will continue to rise, again, led by copper.
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