Categories:
Base Metals
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General Market Commentary
Topics:
General Base Metals
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General Market Commentary
Mining stocks rally as copper price hits 7-month high
On Wednesday, hopes that an escalation of the trade war between the US and China can been avoided (or at least postponed) sparked a massive rally in mining stocks – already buoyed by climbing metals prices.
US President Donald Trump said yesterday he may not increase tariffs on Chinese products on March 1, as talks about the trading relationship between the world's two largest economies continue in Washington.
The US imposed an import duty of 10% on $200B worth of Chinese goods in September. The rate was scheduled to rise to 25% at the beginning of the year before being postponed.
Gold reached a fresh 10-month high just shy of $1,350 an ounce, iron ore's rally was sustained at $88 a tonne and copper finally broke out of its recent trading range to exchange hands at $2.92 a pound, or $6,445 a tonne.
Investors piled into the sector’s big names at the open, but enthusiasm waned in afternoon trading. Glencore got the ball rolling with strong financials for 2018 and a $2 billion share buyback program. Sector watchers are also anticipating bumper profits when BHP, Rio Tinto and Anglo American report in the next fortnight.
Swiss-based Glencore added 2.6% in over-the-counter trading in the US while BHP added 2% — lifting the market valuation of world’s largest mining company by revenue to $140B in New York and bringing it within shouting distance of a one year high.