Gold prices aren't the only metal soaring on the inevitable continuation of inflationary measures by the Federal Reserve, which they now call "quantitative easing" now, as copper is the also moving up in price, and major copper miners like Freeport-McMoRan (NYSE:FCX), BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RIO), Vale SA (NYSE:VALE) are moving up in unison with it.
Copper prices today (Wednesday) increased to $8,430 a ton, the highest levels it has reached since July 2008, or for 27 months. Two-year highs have been the norm for copper since the latter part of September.
Another reason for the higher copper prices is the tightening of stock, where LME stocks have fallen 475 tons to 371,275 tons since February, a 30 percent drop.
The fall in the value of the U.S. dollar is the consequence of the misguided Federal Reserve policies, and that is the major catalyst behind the booming metals prices and upward move of the metal miners.
Showing posts with label Copper Prices 2010. Show all posts
Showing posts with label Copper Prices 2010. Show all posts
Thursday, October 14, 2010
Tuesday, October 5, 2010
Goldman (NYSE:GS) Bumps Up Copper Price Outlook
Goldman Sachs (NYSE:GS) increased its estimates on copper prices going forward, saying shrinking concerns over macroeconomic conditions will push up prices.
Cyclical volatility was specifically cited by Goldman, saying inventories over the next five quarters will plunge, "leading to periods of extreme volatility and price spikes."
For three months, the price estimate for copper was increased from $7,900 to $8,500/mt; for six months, from $7,975 to $8,800/mt; and for 12 months, from $8,050 to $11,000/mt.
Although Goldman said they're taking profits on their long December 2010 position, they advise clients to take a new long position for the December 2011 contract.
Cyclical volatility was specifically cited by Goldman, saying inventories over the next five quarters will plunge, "leading to periods of extreme volatility and price spikes."
For three months, the price estimate for copper was increased from $7,900 to $8,500/mt; for six months, from $7,975 to $8,800/mt; and for 12 months, from $8,050 to $11,000/mt.
Although Goldman said they're taking profits on their long December 2010 position, they advise clients to take a new long position for the December 2011 contract.
Monday, July 19, 2010
Freeport (NYSE:FCX) Earnings Probably Lower Than Last Year
Freeport-McMoRan Copper & Gold's earnings (NYSE:FCX) for the quarter are expected to underperform last year during the same quarter, as the majority of analysts and traders are looking for about $1.31 a share from the metals giant.
Last year during the same quarter, the company generated $1.38 a share in earnings, something that most don't believe they'll be able to meet, let alone surpass.
If Freeport underperforms and is less than $1.31 a share, it'll probably take a pretty big hit, as it's been underperforming over the last week, dropping by over 8 percent during that time.
What is more interesting to me will be the guidance the company gives, as some expect copper prices demand and prices to rise, and it'll be important to see if Freeport confirms that as being a real possibility or not.
The quarterly report from Freeport will be released before the market opens on July 21st.
Last year during the same quarter, the company generated $1.38 a share in earnings, something that most don't believe they'll be able to meet, let alone surpass.
If Freeport underperforms and is less than $1.31 a share, it'll probably take a pretty big hit, as it's been underperforming over the last week, dropping by over 8 percent during that time.
What is more interesting to me will be the guidance the company gives, as some expect copper prices demand and prices to rise, and it'll be important to see if Freeport confirms that as being a real possibility or not.
The quarterly report from Freeport will be released before the market opens on July 21st.
Wednesday, July 14, 2010
Freeport (NYSE:FCX), Not Alcoa (NYSE:AA), Will Measure Economy Better
Many analysts and commentators have used the quarterly results of Alcoa (NYSE:AA) in attempts to paint the economy as rosy and recovering. Freeport-McMoRan Copper & Gold (NYSE:FCX), on the other hand, should give us a more accurate measure, as aluminum prices reveal something different, as they remain low, indicating demand remains down.
Copper is a better indicator, as it spreads across a number of industries in a much large way, and in that regard Freeport will offer a more accurate picture of how the economy is going.
But what has to be taken into consideration, as in Alcoa, is the cost-cutting measures associated with quarterly results.
While these are good steps for a company to take, and should be aggressively attacked even in the best of economic conditions, they can give a false economic indicator if you're simply measuring it by earnings per share, which while good for investors and the company, do nothing to reveal the true condition of an economy.
Demand is the bottom line, along with supply, and that will be revealed by the price of any raw material. It's as simple as that.
So when companies and economic commentators throw around all their analysis and numbers, just look at one: the price of the commodity being talked about.
If copper prices rise, that means there is increased demand which supply is having a hard time keeping up with. That is what determines the actual economic conditions, not earnings per share, which can be increased through cost-cutting measures and selling off of assets, without demand for the actual raw material increasing.
So with Alcoa, their numbers weren't related to the increase in price of aluminum, and that shows demand is still down or there's too much supply That will be the same with copper in relationship to Freeport.
If Freeport has solid earnings per share, it's because of good management in cutting costs, not because the economic conditions are improving. That assumes the price of copper remains down.
Copper is a better indicator, as it spreads across a number of industries in a much large way, and in that regard Freeport will offer a more accurate picture of how the economy is going.
But what has to be taken into consideration, as in Alcoa, is the cost-cutting measures associated with quarterly results.
While these are good steps for a company to take, and should be aggressively attacked even in the best of economic conditions, they can give a false economic indicator if you're simply measuring it by earnings per share, which while good for investors and the company, do nothing to reveal the true condition of an economy.
Demand is the bottom line, along with supply, and that will be revealed by the price of any raw material. It's as simple as that.
So when companies and economic commentators throw around all their analysis and numbers, just look at one: the price of the commodity being talked about.
If copper prices rise, that means there is increased demand which supply is having a hard time keeping up with. That is what determines the actual economic conditions, not earnings per share, which can be increased through cost-cutting measures and selling off of assets, without demand for the actual raw material increasing.
So with Alcoa, their numbers weren't related to the increase in price of aluminum, and that shows demand is still down or there's too much supply That will be the same with copper in relationship to Freeport.
If Freeport has solid earnings per share, it's because of good management in cutting costs, not because the economic conditions are improving. That assumes the price of copper remains down.
Friday, July 9, 2010
Copper Futures Prices Move Up Today
Current copper futures prices moved up to end the week, as metals in general moved up with the broader market, as temporary optimism has pervaded the market, although nothing has changed by sentiment concerning the global economy, rather the economic reality.
Either way, copper for September delivery increased 3.80 cents, or 1.3 percent, to finish at $3.0535 a pound on the COMEX metals division of the New York Mercantile Exchange.
LME copper for three-months delivery ended the day at $6,769 a ton, up from Thursday's close of $6,610 a ton.
Copper inventories have been falling, giving the impression that demand has increased, causing copper prices to rise.
Either way, copper for September delivery increased 3.80 cents, or 1.3 percent, to finish at $3.0535 a pound on the COMEX metals division of the New York Mercantile Exchange.
LME copper for three-months delivery ended the day at $6,769 a ton, up from Thursday's close of $6,610 a ton.
Copper inventories have been falling, giving the impression that demand has increased, causing copper prices to rise.
Tuesday, July 6, 2010
Freeport (NYSE:FCX), BHP Billiton (NYSE:BHP), Teck Resources (NYSE:TCK), Rio Tinto (NYSE:RTP) Will Get Boost from Increasing Copper Prices
Mining companies like Freeport-McMoRan (NYSE:FCX), BHP Billiton (NYSE:BHP), Teck Resources (NYSE:TCK) and Rio Tinto (NYSE:RTP), and others with significant exposure to copper will benefit in the long term, as it's expected for demand to increase and supply to dwindle in the years ahead.
There's no doubt copper prices will remain under pressure in the near term, and there's no way of knowing when that will start to change.
But the pent-up demand for copper is still there, and when the global economy and specific economies of countries begin to rebound, copper prices will surge on the built up demand.
Much of this is based on the quality of ore being found by the miners, which has been of a lower quality. That ultimately will lead to higher copper prices because companies will have to go deeper to find higher quality copper deposits, which will require larger inputs or higher costs.
That should put the miners in a stronger position, which will allow them to increase margins. The higher costs of copper would mean nothing if the margins to get it aren't improved.
But the demand will definitely be there, and that should produce both higher copper margins, profits and prices.
There's no doubt copper prices will remain under pressure in the near term, and there's no way of knowing when that will start to change.
But the pent-up demand for copper is still there, and when the global economy and specific economies of countries begin to rebound, copper prices will surge on the built up demand.
Much of this is based on the quality of ore being found by the miners, which has been of a lower quality. That ultimately will lead to higher copper prices because companies will have to go deeper to find higher quality copper deposits, which will require larger inputs or higher costs.
That should put the miners in a stronger position, which will allow them to increase margins. The higher costs of copper would mean nothing if the margins to get it aren't improved.
But the demand will definitely be there, and that should produce both higher copper margins, profits and prices.
Thursday, June 24, 2010
Copper Prices Rising, But Not Demand
Copper prices have risen again today, the third day in a row, even after the horrendous fall in new housing starts, which industry accounts for the majority of copper demand.
Housing starts in the United States plummeted by 33 percent, the largest decline ever.
So the fact that copper prices are going up while demand is going down, tells us that there is something else going on which is driving the price besides demand.
There is of course, and that something is low interest rates, which will continue to drive down the appeal of the U.S. dollar, while driving up the prices of commodities.
This isn't to say that demand for copper won't be relevant, as it's sure to keep a damper on how high copper prices will go. But it does mean copper prices have some room to move up as money looks for a place to grow.
The result of that will bring inflation, and inflation will of course push commodity prices higher overall, even when demand is low. As I said though, demand will affect how far those prices can rise, even in a low-interest rate environment.
Housing starts in the United States plummeted by 33 percent, the largest decline ever.
So the fact that copper prices are going up while demand is going down, tells us that there is something else going on which is driving the price besides demand.
There is of course, and that something is low interest rates, which will continue to drive down the appeal of the U.S. dollar, while driving up the prices of commodities.
This isn't to say that demand for copper won't be relevant, as it's sure to keep a damper on how high copper prices will go. But it does mean copper prices have some room to move up as money looks for a place to grow.
The result of that will bring inflation, and inflation will of course push commodity prices higher overall, even when demand is low. As I said though, demand will affect how far those prices can rise, even in a low-interest rate environment.
Tuesday, June 22, 2010
Freeport-McMoRan (NYSE:FCX), Southern Copper (NASDAQ:SCCO) and Copper Demand
While everyone got excited yesterday over the decision to all the yuan to float more against the U.S. dollar, it didn't take long for the market to realize it wasn't that significant, even though precious metals like copper moved up quickly, and copper-exposed companies like Freeport-McMoRan (NYSE:FCX) and Southern Copper (NASDAQ:SCCO) plunged, after the brief euphoria left the market.
Calls also drove up the price of Southern Copper yesterday. But it's highly unlikely attempts to move the stock up by 14 percent to make a profit will work, as macro-economics simply aren't going to allow that to happen, as there's nothing out there to justify that happening, even if some temporary event or story causes some short-term optimism.
Several things are working against copper, and some of them very specific to demand. There is the Chinese property market inflation worries, which China is cooling off, and which copper demand will decline. The U.S. new housing starts are plunging as well, with the tax credit eliminated, which immediately resulted in 10 percent less starts.
Finally, there's the sovereign debt crisis in Europe, which is so bad it's impossible to know or predict how long that will last, or the real depths of the crisis.
That will keep copper demand in check for an unknown period of time, and there is little if anything that will change that in the short term, and in the long term it doesn't look much better.
Those excited about the decision of the Chinese with the yuan will need to take into account the parameters imposed upon copper and other precious metals by the ongoing recession, and the global situation is tenuous at best, with demand for raw materials far less than projected not that long ago.
Until the larger economic picture improves, Freeport and Southern Copper are going to struggle to grow. The best thing to look for there is probably buying opportunities through low price-points, with a view to the long term.
Short term there isn't much happening with these and other companies which have large exposure to the copper market.
Neither of the two companies mentioned here have done much of anything in share price since October 2009, and that's unlikely to change.
Calls also drove up the price of Southern Copper yesterday. But it's highly unlikely attempts to move the stock up by 14 percent to make a profit will work, as macro-economics simply aren't going to allow that to happen, as there's nothing out there to justify that happening, even if some temporary event or story causes some short-term optimism.
Several things are working against copper, and some of them very specific to demand. There is the Chinese property market inflation worries, which China is cooling off, and which copper demand will decline. The U.S. new housing starts are plunging as well, with the tax credit eliminated, which immediately resulted in 10 percent less starts.
Finally, there's the sovereign debt crisis in Europe, which is so bad it's impossible to know or predict how long that will last, or the real depths of the crisis.
That will keep copper demand in check for an unknown period of time, and there is little if anything that will change that in the short term, and in the long term it doesn't look much better.
Those excited about the decision of the Chinese with the yuan will need to take into account the parameters imposed upon copper and other precious metals by the ongoing recession, and the global situation is tenuous at best, with demand for raw materials far less than projected not that long ago.
Until the larger economic picture improves, Freeport and Southern Copper are going to struggle to grow. The best thing to look for there is probably buying opportunities through low price-points, with a view to the long term.
Short term there isn't much happening with these and other companies which have large exposure to the copper market.
Neither of the two companies mentioned here have done much of anything in share price since October 2009, and that's unlikely to change.
Thursday, June 17, 2010
Copper Prices Under Pressure
Copper prices are going to remain under downward pressure as housing markets in the United States and China are slowing down, causing copper demand to shrink some.
Companies like Freeport-Mcmoran (NYSE:FCX) will be under pressure as well, as those with heavy copper exposure won't have anything to celebrate for some time to come, as there's nothing to suggest new housing starts in the U.S. will start to rise any time soon, as the tax credit has now ended.
And the Chinese property market is being cooled off in order to battle a potential bubble in the urban areas of the country, making copper demand there slower than expected not too long ago.
So for now, copper prices should fall, or at best, remain level, as there's nothing to indicate demand will rise in the near term.
Companies like Freeport-Mcmoran (NYSE:FCX) will be under pressure as well, as those with heavy copper exposure won't have anything to celebrate for some time to come, as there's nothing to suggest new housing starts in the U.S. will start to rise any time soon, as the tax credit has now ended.
And the Chinese property market is being cooled off in order to battle a potential bubble in the urban areas of the country, making copper demand there slower than expected not too long ago.
So for now, copper prices should fall, or at best, remain level, as there's nothing to indicate demand will rise in the near term.
Wednesday, June 16, 2010
New Housing Starts Crash After Government Props Removed
Confirming the housing starts have been largely a result of the tax credit which expired in May, new homes being built plummeted by 10 percent in the month, showing the reality of the weakness of the housing market.
Compared to a year ago, that's just under an 18 percent drop in new housing starts, which in May 2009 increased by 7.8 percent.
New housing starts in April were also downwardly revised, falling from the previous data where it was said there was a 5.8 percent increase, down to 3.9 percent new housing starts for the month.
With the first-time buyer tax credit now gone, housing starts should continue to plunge, as there's nothing there to create the demand brought on by the government initiative.
It adds to the concern of copper demand and prices, as China is decreasing its demand for copper to battle inflation in their property markets.
Compared to a year ago, that's just under an 18 percent drop in new housing starts, which in May 2009 increased by 7.8 percent.
New housing starts in April were also downwardly revised, falling from the previous data where it was said there was a 5.8 percent increase, down to 3.9 percent new housing starts for the month.
With the first-time buyer tax credit now gone, housing starts should continue to plunge, as there's nothing there to create the demand brought on by the government initiative.
It adds to the concern of copper demand and prices, as China is decreasing its demand for copper to battle inflation in their property markets.
Monday, June 14, 2010
Watching Freeport-McMoran (NYSE:FCX) Through Copper Prices
With copper prices being the primary metric to use with Freeport-McMoran (NYSE:FCX), it's the major indicator as to where the share price of the company will go.
Mirroring the mixed economic news that has been coming out recently, copper traders are buying puts and calls today, indicating the uncertainty as to the direction of copper prices going forward.
Part of this is probably from the news the industrial sector of Europe was in better condition last month than anticipated, heightening the idea demand for copper and other raw materials may be in higher demand than expected.
I find that hard to believe, but it did add uncertainty to the market, as evidenced in the behavior of traders.
Either way, copper prices are what we watch, and it really doesn't matter what way traders think things will go for those investing for the long term, it only matters which way they actually go, and what the demand really is.
Mirroring the mixed economic news that has been coming out recently, copper traders are buying puts and calls today, indicating the uncertainty as to the direction of copper prices going forward.
Part of this is probably from the news the industrial sector of Europe was in better condition last month than anticipated, heightening the idea demand for copper and other raw materials may be in higher demand than expected.
I find that hard to believe, but it did add uncertainty to the market, as evidenced in the behavior of traders.
Either way, copper prices are what we watch, and it really doesn't matter what way traders think things will go for those investing for the long term, it only matters which way they actually go, and what the demand really is.
Tuesday, June 8, 2010
HSBC (NYSE:HBC) Upgrades Freeport-Mcmoran (NYSE:FCX)
HSBC (NYSE:HBC) upgraded Freeport-Mcmoran (NYSE:FCX) today from "Neutral" to "Overweight" while cutting their price target on the company from $85 to $80.
The mixed signals are from the uncertainties of the copper market which is highly dependent on demand from China, which is expected to drop as they attack the inflation in connection to their property market, which is a large user of copper.
Over the last 30 days or so, Freeport-Mcmoran has plunged in price by 22 percent, and 15 percent just over the last several days.
With Freeport trading at a forward price-to-earnings ratios of 7.25, it could be reaching a bottom and could be a time to buy, as some analysts believe the selloff in copper stocks has been overdone.
Even so, there is some caution to retain even at these levels, as some of the major Chinese cities experienced drops in property sales as high as 70 percent over the last month, and that has to cut deeply into copper demand.
The mixed signals are from the uncertainties of the copper market which is highly dependent on demand from China, which is expected to drop as they attack the inflation in connection to their property market, which is a large user of copper.
Over the last 30 days or so, Freeport-Mcmoran has plunged in price by 22 percent, and 15 percent just over the last several days.
With Freeport trading at a forward price-to-earnings ratios of 7.25, it could be reaching a bottom and could be a time to buy, as some analysts believe the selloff in copper stocks has been overdone.
Even so, there is some caution to retain even at these levels, as some of the major Chinese cities experienced drops in property sales as high as 70 percent over the last month, and that has to cut deeply into copper demand.
Monday, June 7, 2010
Copper Falls on Renewed Recession Fears
Copper prices fell even further today, dropping by 5 cents to $2.7660 a pound, or 1.9 percent, as recession worries return as macro-economic data confirms what a number of economists and investors have thought, the we had never left the recession, or there was going to be a double-dip recession.
However you want to describe it, there is little positive happening economically to justify anyone saying we're in a recovery, even if they want to say it's a slow recovery. How about a "no" recovery, which is closer to the truth.
All that has happened is the Obama administration and Federal Reserve spent hundreds of billions with literally no effect.
What had been hoped of course was they would buy time so the economy would recover, but that has failed, and the idea of pumping hundreds of billions more into the economy hopefully won't even be considered, as we are already under water as a nation (referring to the U.S.) and further debt will bring up past the point of no return, if we're not already there.
The nail in the coffin was the jobs report, which finally revealed the faux job number being reported as a reason to justify saying we were in an economic recovery. Now that those that were unconvinced have to face the reality that the private sector isn't producing any jobs to speak up, and the props of hundreds of billions has left us in worse shape, and nothing to show for it except the assertion things would have been worst if the government hadn't taken those steps.
That's an unprovable theory, and in fact a small number of economists have stated from the beginning that it wouldn't work and the government and politicians needed to keep their hands off the economy and let it adjust and fix itself.
Of course they couldn't resist spending our children's and grandchildren's future away, and focused shortsightedly on the present, disregarding the consequences they were warned about.
Either way, we're going to experience difficult times ahead of us, and as copper prices show, there is already a cut in demand, and more to come.
This doesn't mean all commodity prices will fall, as iron ore prices were upped again today for Japanese steelmakers by Rio Tinto (NYSE:RTP) and BHP Billiton (NYSE:BHP); although it's questionable as to the sustainability of that move.
But other than gold, and to a lesser degree, possibly silver, most commodity prices will be under strong downward pressure in the near future, as the U.S., China and Europe are all slowing down, and there are really no places to go to make up for that.
However you want to describe it, there is little positive happening economically to justify anyone saying we're in a recovery, even if they want to say it's a slow recovery. How about a "no" recovery, which is closer to the truth.
All that has happened is the Obama administration and Federal Reserve spent hundreds of billions with literally no effect.
What had been hoped of course was they would buy time so the economy would recover, but that has failed, and the idea of pumping hundreds of billions more into the economy hopefully won't even be considered, as we are already under water as a nation (referring to the U.S.) and further debt will bring up past the point of no return, if we're not already there.
The nail in the coffin was the jobs report, which finally revealed the faux job number being reported as a reason to justify saying we were in an economic recovery. Now that those that were unconvinced have to face the reality that the private sector isn't producing any jobs to speak up, and the props of hundreds of billions has left us in worse shape, and nothing to show for it except the assertion things would have been worst if the government hadn't taken those steps.
That's an unprovable theory, and in fact a small number of economists have stated from the beginning that it wouldn't work and the government and politicians needed to keep their hands off the economy and let it adjust and fix itself.
Of course they couldn't resist spending our children's and grandchildren's future away, and focused shortsightedly on the present, disregarding the consequences they were warned about.
Either way, we're going to experience difficult times ahead of us, and as copper prices show, there is already a cut in demand, and more to come.
This doesn't mean all commodity prices will fall, as iron ore prices were upped again today for Japanese steelmakers by Rio Tinto (NYSE:RTP) and BHP Billiton (NYSE:BHP); although it's questionable as to the sustainability of that move.
But other than gold, and to a lesser degree, possibly silver, most commodity prices will be under strong downward pressure in the near future, as the U.S., China and Europe are all slowing down, and there are really no places to go to make up for that.
Thursday, June 3, 2010
Freeport-McMoran (NYSE:FCX) Sees Copper Risk from China Inflation Measures
Freeport-McMoran Copper & Gold (NYSE:FCX) says China's attempt to combat inflation by slowing down their economy could significantly reduce demand for copper going forward.
Copper prices have fallen 15 percent over the last couple of months, and is sure to experience some more downward pressure because of the news from China.
This would also put pressure on margins for Freeport and any company with a strong exposure to copper.
Freeport has plans to spend $100 million in 2010 for copper and gold exploration based on assumptions demand will continue. While for gold that's the case without a doubt, copper looks like it could be in for a rough ride as the U.S. market levels and Europe continues to struggle.
Copper prices have fallen 15 percent over the last couple of months, and is sure to experience some more downward pressure because of the news from China.
This would also put pressure on margins for Freeport and any company with a strong exposure to copper.
Freeport has plans to spend $100 million in 2010 for copper and gold exploration based on assumptions demand will continue. While for gold that's the case without a doubt, copper looks like it could be in for a rough ride as the U.S. market levels and Europe continues to struggle.
Tuesday, June 1, 2010
Goldman Sachs (NYSE:GS) Sees Copper, Crude Oil Rising
Goldman Sachs (NYSE:GS) sees copper and crude oil rising by the end of 2010, surprisingly based on what they're saying will be economic growth.
They say copper could increase to as high as $7,755 a metric ton, while crude oil will probably hit $93 a barrel.
“When you look at the underlying fundamentals, whether it’s macroeconomic data or commodity-specific data, the fundamental picture is still very strong,” said Jeffrey Currie. "With copper, the fundamentals are outright rock solid.”
This is an interesting and contrarian viewpoint for the economic conditions we face, and calling the macroeconomic data fundamentals very strong is puzzling to say the least, especially in light of the emerging slowdown in China, which has caught a lot of people off-guard.
One thing to keep in mind with China is they will probably only slow down a little in comparison to past performance, but even a one percent decline in China is quite a huge hit for raw materials companies and others looking to import to the country.
There are too many variables out there to justify this type of optimism, and while there may be some growth, the manufacturing sector is already in retreat, and commodity prices falling along with demand.
They say copper could increase to as high as $7,755 a metric ton, while crude oil will probably hit $93 a barrel.
“When you look at the underlying fundamentals, whether it’s macroeconomic data or commodity-specific data, the fundamental picture is still very strong,” said Jeffrey Currie. "With copper, the fundamentals are outright rock solid.”
This is an interesting and contrarian viewpoint for the economic conditions we face, and calling the macroeconomic data fundamentals very strong is puzzling to say the least, especially in light of the emerging slowdown in China, which has caught a lot of people off-guard.
One thing to keep in mind with China is they will probably only slow down a little in comparison to past performance, but even a one percent decline in China is quite a huge hit for raw materials companies and others looking to import to the country.
There are too many variables out there to justify this type of optimism, and while there may be some growth, the manufacturing sector is already in retreat, and commodity prices falling along with demand.
Monday, May 17, 2010
Commodity Prices Plunge Today
Commodity prices today are down significantly, as industrial metals led the plunge, as concerns over demand from Europe and China hinder the market.
Fighting the debt in Europe and inflation in China has optimism in commodities shake for the first time in awhile, and some companies and countries are concerned over how much the possible drop in demand will have an effect upon them.
Metals like copper, tin, zinc, lead and aluminum are all down, as traders and investors look at the near-term for the metals, and whether or not the recently expected commodity demand is sustainable over the mid-term.
This also seems to have affected the price of oil and gas, as the question now is whether or not consumers will travel and spend as much with this weighing on their minds.
Fighting the debt in Europe and inflation in China has optimism in commodities shake for the first time in awhile, and some companies and countries are concerned over how much the possible drop in demand will have an effect upon them.
Metals like copper, tin, zinc, lead and aluminum are all down, as traders and investors look at the near-term for the metals, and whether or not the recently expected commodity demand is sustainable over the mid-term.
This also seems to have affected the price of oil and gas, as the question now is whether or not consumers will travel and spend as much with this weighing on their minds.
Tuesday, May 11, 2010
Northgate Minerals (TSE:NGX) Up On Higher Metal Prices
Northgate Minerals (TSE:NGX) first quarter earnings came in at estimates, generating earnings of $4.9 million, or 2 cents a share. Adjusted quarterly earnings stood a 3 cents a share, in line with what analysts had been looking for.
Revenue for the quarter increased to $125.3 million, slightly up from the $123.8 million last year in the same quarter.
Profits last year were higher at $21.4 million, or 8 cents a share.
Gold and copper production dropped significantly in the first quarter, with gold production plunging by 32 percent to 73,362 ounces, and copper production falling by 37 percent, or 9.5 million pounds.
Guidance for production for the full year was given at 310,000 ounces of gold at a cash cost of $553 an ounce.
The company was helped by stronger gold and copper prices during the quarter.
Revenue for the quarter increased to $125.3 million, slightly up from the $123.8 million last year in the same quarter.
Profits last year were higher at $21.4 million, or 8 cents a share.
Gold and copper production dropped significantly in the first quarter, with gold production plunging by 32 percent to 73,362 ounces, and copper production falling by 37 percent, or 9.5 million pounds.
Guidance for production for the full year was given at 310,000 ounces of gold at a cash cost of $553 an ounce.
The company was helped by stronger gold and copper prices during the quarter.
Wednesday, May 5, 2010
Xstrata (LSE:XTA) Led by Copper and Coal
Xstrata (LSE:XTA) announced today that production for the first quarter was up, led by copper and coal.
Copper and coal is expected to account for just under 75 percent of Xstrata's earnings in 2010, with copper leading the way with 38 percent, and coal just behind it at 36 percent.
For the first quarter, copper production rose by 3 percent, while coal production increased by 9 percent, mostly on solid production in Australia.
Analysts are looking for Xstrata's earnings to surge 93 percent as share on a continual rise in commodity prices.
Copper and coal is expected to account for just under 75 percent of Xstrata's earnings in 2010, with copper leading the way with 38 percent, and coal just behind it at 36 percent.
For the first quarter, copper production rose by 3 percent, while coal production increased by 9 percent, mostly on solid production in Australia.
Analysts are looking for Xstrata's earnings to surge 93 percent as share on a continual rise in commodity prices.
Tuesday, April 27, 2010
Newmont (NYSE:NEM) Soars on Copper, Gold Prices
Newmont Mining (TSE:NEM)(NYSE:NEM) had its earnings soar as increasing prices of gold and copper generated earnings of $546 million, or $1.11 a share.
Production was another key factor in the solid quarter for Newmont, with gold production up slightly, but copper production was over double what it was a year ago, as well as copper prices, which almost doubled from $1.69 a pound last year during the same quarter to $3.33 a pound the latest quarter.
Average price for gold per ounce was $1,106 an ounce, up from $906 an ounce last year.
“Fundamentals including evidence of a rebounding market [for gold] in India and growth from the jewelry market in China, plus sustained flows and historically low central bank sales continue to support gold price performance,” Newmont CEO Richard O’Brien told analysts in the conference call.
Production was another key factor in the solid quarter for Newmont, with gold production up slightly, but copper production was over double what it was a year ago, as well as copper prices, which almost doubled from $1.69 a pound last year during the same quarter to $3.33 a pound the latest quarter.
Average price for gold per ounce was $1,106 an ounce, up from $906 an ounce last year.
“Fundamentals including evidence of a rebounding market [for gold] in India and growth from the jewelry market in China, plus sustained flows and historically low central bank sales continue to support gold price performance,” Newmont CEO Richard O’Brien told analysts in the conference call.
Friday, April 23, 2010
Freeport-McMoRan (NYSE:FCX) Locks in Profits
Freeport-McMoRan (NYSE: FCX) has a great quarter as expected, as the mining company, through its gold, copper and molybdenum metals carved out a nice profit of $897 million, or $2.00 a share.
Last year during the same quarter they only generated $0.11 a share.
Even with gold production dropping to 478,000 ounces and copper to 960 million pounds, a little less than last year, molybdenum surged to 17 million pounds and the price increases in all of them more than made up for production decline.
As with every significant copper mining company, Freeport enjoyed the rise of copper prices, whose realized price was $3.42 a pound, almost twice what it was last year in the same quarter.
Gold rose from $960 an ounce to $1,110 an ounce this year, and molybdenum had a solid 30 percent upward movement, reaching $15.09 a pound. Add to that the additional production of molybdenum and it had a great effect on the earnings.
With copper and gold, prices are expected to continue to rise, and the demand for steel and the use of molybdenum in connection to that sure to grow, everything is running on all cylinders for Freeport.
Gold, depending on where the price has been when the next quarterly report comes out, is probably the least sure in the short term, as there are a lot of variables and factors which could go either way for the metal, and things like Greece, inflation, safety, the euro and the U.S. dollar all connected to its performance.
So many of these factors are moving on almost a daily basis, and so gold will swing during its ultimate continuing upward climb, but mining companies, in that regard, will go up and down with it. Freeport is one of those, although they won't swing as much as the junior miners who are more susceptible to the price movements.
Last year during the same quarter they only generated $0.11 a share.
Even with gold production dropping to 478,000 ounces and copper to 960 million pounds, a little less than last year, molybdenum surged to 17 million pounds and the price increases in all of them more than made up for production decline.
As with every significant copper mining company, Freeport enjoyed the rise of copper prices, whose realized price was $3.42 a pound, almost twice what it was last year in the same quarter.
Gold rose from $960 an ounce to $1,110 an ounce this year, and molybdenum had a solid 30 percent upward movement, reaching $15.09 a pound. Add to that the additional production of molybdenum and it had a great effect on the earnings.
With copper and gold, prices are expected to continue to rise, and the demand for steel and the use of molybdenum in connection to that sure to grow, everything is running on all cylinders for Freeport.
Gold, depending on where the price has been when the next quarterly report comes out, is probably the least sure in the short term, as there are a lot of variables and factors which could go either way for the metal, and things like Greece, inflation, safety, the euro and the U.S. dollar all connected to its performance.
So many of these factors are moving on almost a daily basis, and so gold will swing during its ultimate continuing upward climb, but mining companies, in that regard, will go up and down with it. Freeport is one of those, although they won't swing as much as the junior miners who are more susceptible to the price movements.
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