Metals & Mining Monitor | Enhanced Expectations of Fed Rate Cut Boost Base Metal Prices; Pilbara Sees Sharp Revenue and Profit Drop in FY2024

Moomoo News AU joined discussion · Aug 26 16:04

Metals & Mining Monitor | Enhanced Expectations of Fed Rate Cut Boost Base Metal Prices; Pilbara Sees Sharp Revenue and Profit Drop in FY2024

Hello mooers! Check out the latest market dynamics of the metals and mining industry over the past week.
•Base metals: Aluminum prices surge by 9% to a six-week peak
•Energy metals: Nickel prices increase by 3.2%
•Precious metals: Silver prices rise by 4.6% in a week
•Bulk commodities: Iron ore prices rise by 4.5%

Spot Price Snapshot

Key Price Moves

Aluminum prices rose to a six-week peak at nearly $2,500 per tonne. This surge is primarily attributed to a combination of heightened expectations for a Federal Reserve interest rate cut and what is perceived as a market correction toward fair value following a substantial decline in the previous month. Moreover, in a surprising turn, China's aluminum imports witnessed an 11.5% year-on-year increase in July, notwithstanding robust domestic production.

The market is concurrently grappling with escalating costs for alumina, the crucial raw material in aluminum manufacturing. Supply has been constricted due to reductions in Australian refinery operations, exerting additional pressure on prices. This constraint on supply has precipitated a notable depletion of alumina stocks, lending further momentum to the ongoing price increase.

Copper prices have consistently remained over the $9,000 per metric ton threshold, sustaining a recovery from the five-month nadir of $8,650 recorded on August 5th. The market is actively assessing the dip in demand from leading global consumers. Recent trade figures indicate a deceleration in China’s copper exports from previously unprecedented levels. This has sparked optimism that the downturn in the country’s domestic consumption may have reached its lowest point, alleviating the pressure on local producers to seek out international buyers to sustain their sales targets.

Despite the hopeful signs in export dynamics, the broader sentiment regarding China's manufacturing sector remains subdued, as reflected in year-to-date figures. Manufacturing Purchasing Managers' Index (PMI) reports from both the National Bureau of Statistics (NBS) and Caixin revealed contractions for July, underscoring the persistent challenges faced by the manufacturing industry. $Copper Futures(MAR5) (HGmain.US)$

Top Company News

SQM Reports Mixed Q2 Results

In the second quarter of 2024, $Sociedad Quimica Y Minera De Chile (SQM.US)$ reported earnings that did not meet analyst predictions, while their revenue figures exceeded market estimates. The company announced a profit of $213.6 million, equating to 75 cents per share, a notable decrease from the $580.2 million or $2.03 per share seen in the comparable quarter of the previous year. These earnings fell short of the anticipated 99 cents per share. The company's revenues reached $1,293.6 million for the quarter, marking a 37% decline from the same period last year but still managing to outperform the consensus revenue estimate of $1,260.7 million. This mixed financial outcome highlights the challenges and resilience of SQM amid fluctuating market conditions.

Pilbara Minerals Sees Sharp Revenue and Profit Drop in FY2024

$Pilbara Minerals Ltd (PLS.AU)$ has disclosed a substantial downturn in its financial performance for the fiscal year concluding on June 30, 2024. The company witnessed a steep 69% decline in revenue from ordinary activities, which plummeted to AU$1.25 billion from the AU$4.06 billion reported in the preceding year. This decline has significantly impacted the company's profitability, with earnings per share (EPS) dwindling to AU$0.0845 from AU$0.7893 in the prior-year period.

Northern Star Shines with Increased Annual Profit Amid Rising Gold Prices

$Northern Star Resources Ltd (NST.AU)$, a prominent Australian gold mining company, announced on Thursday an impressive 9.1% increase in its annual net profit, buoyed by soaring gold prices. For the 12-month period ending in June, Northern Star's net profit reached a robust AU$638.5 million (US$430.5 million), climbing from approximately AU$585 million in the previous year.

The miner's financial success was significantly supported by the surging gold prices, which effectively absorbed the impact of elevated production costs. In addition, Northern Star's favorable outcome was further bolstered by unprecedented gold sales volume, capitalizing on the strong market demand.

Whitehaven Coal Divests 30% Mine Stake for $1.08 Billion Amid Profit Decline

$Whitehaven Coal Ltd (WHC.AU)$ announced the signing of agreements that will see the sale of a 30% interest in one of its newly acquired Australian coal mines to two Japanese steel manufacturers for a sum of $1.08 billion. This strategic move comes as the company faces a significant drop in annual profits, largely attributed to coal prices experiencing a substantial reduction by half.

The decision to offload a portion of its mine stake represents a proactive step by Whitehaven Coal to navigate through the challenging economic landscape marked by fluctuating coal prices. The injection of $1.08 billion through this transaction is anticipated to strengthen the company's financial position, even as it grapples with diminished profitability in its operations. The collaboration with the Japanese steelmakers also underscores the continued demand for coal within the industrial sector, particularly from key international markets.