Archive | Commodity Super-Cycle and Decline

https://www.spglobal.com/

BHP Group and Rio Tinto continued to dominate the list of top metals and mining companies by market capitalization in September, as the sector collectively lost value against a strengthening U.S. dollar and reports of numerous environmental, social and governance issues.

The 25 largest companies in the space held a total market cap of US$817.07 billion as of Sept. 30. Rio Tinto and BHP Group had an aggregate market value of $220.39 billion, more than a quarter of the combined total of the 25 companies.

Market cap percentage changes were calculated based on reported currencies, while the analysis bases company rankings on market values converted into U.S. dollars. Continue Reading →

https://www.cnbc.com/

The next phase of the economic recovery is likely to be driven by commodity-intensive infrastructure investment, analysts have told CNBC, potentially setting the stage for further gains across the industrial space in the coming months.

The prediction comes at a time when market participants are closely monitoring the strength of the global economic recovery, as many countries grapple with an upsurge in the number of reported Covid-19 infections.

The coronavirus pandemic has prompted forecasters to issue dire economic projections this year, with the OECD warning on Wednesday that the outlook remains “exceptionally uncertain.” Continue Reading →

https://m.miningweekly.com/

Since lockdown measures to contain Covid-19 around the world have eased, ratings and research agency Standard & Poor’s Global (S&P Global) says the reopening of economies, combined with monetary stimulus by banks and governments, has allowed industrial metal prices to rise.

However, even though industrial metal prices have risen from the lows experienced in the first quarter of the year, there remains a possibility of a second wave of Covid-19 infections as lockdowns are eased.

“It nevertheless remains a significant downside risk to industrial metal prices for the rest of the year, despite local supply-side impacts that could provide some price support for particular commodities,” the agency states. Continue Reading →

https://www.reuters.com/

MELBOURNE (Reuters) – Major miners are better positioned to weather the coronavirus disruption compared with previous downturns, having drastically reined in debt-fueled buying and operating costs amid investor scrutiny and pressure.

But smaller players could find themselves adrift as capital dries up. The International Monetary Fund predicted the coronavirus pandemic could cause the steepest downturn since the Great Depression of the 1930s.

An exception will be companies that have already secured tie-ups with majors on development projects, in arrangements that see investment step up if richer veins are found, according to interviews with a dozen industry executives, investors and analysts. But that is just a tiny fraction of the junior market. Continue Reading →

https://uk.reuters.com/

LONDON (Reuters) – Three months can be a very long time in markets, the last three months particularly. COVID-19 has upended the world as we know it, forcing millions of people into lockdown, wiping out global economic growth and triggering a massive government response, most recently in the form of a historic multilateral deal to prop up oil prices.

In the world of industrial metals, the coronavirus has generated an unprecedented demand shock and, as ever more mines close, a lagging supply shock.

Pity the analysts who have to try to make sense of this chaotic world. Unsurprisingly, base metals forecasts have been slashed in the latest Reuters analysts poll relative to January. Continue Reading →

https://www.reuters.com/

MOSCOW/LONDON/MELBOURNE (Reuters) – From using drones for field inspections to stockpiling cyanide, miners are scrambling to maintain output amid the coronavirus pandemic, a task made trickier in underground mines where social distancing is nearly impossible.

The virus has claimed 8,700 lives and infected over 200,000 globally. While miners have faced some outages, due to government shutdowns in places like Peru and Mongolia, most production continues.

In a defensive step, miners have begun stockpiling fuel, hydrofluoric acid, lime and other industry staples, including cyanide, which is used to extract gold from rock. Continue Reading →

https://finance.yahoo.com/

(Bloomberg) — When do you catch a falling knife? That’s what investors in resource-related stocks must wonder after the Stoxx basic resources sub-sector tumbled nearly 10% since the coronavirus crisis escalated in mid-January, and as commodity prices are rebounding today.

Metals and miners have been feeling the heat, as uncertainty mount over the impact on Chinese economic growth and demand for commodities. But as in every sell-off, pockets of opportunity may be emerging.

First, there’s the context: China now accounts for over half of global demand for industrial metals, compared to 20-25% in 2003 when the SARS virus broke out, says Hans Guennewigk, a portfolio manager at Consortia Asset Management. But: there’s also what the country might do to limit the economic damage. Continue Reading →

https://www.bloomberg.com/

Private equity firms lost interest in the mining world last year, pumping 75% less money into the sector as they focused more on funding existing investments.

Investments dropped to $500 million from $2 billion a year earlier, according to a report by law firm Bryan Cave Leighton Paisner. That was the lowest amount since the company started tracking the space in 2013.

Private equity poured money into the mining sector several years ago when big producers were forced to shed assets amid a collapse in commodity prices. Continue Reading →