Base Metals and Their Welcome Rise Last Week
Debt reduction steps pushed Freeport higher
Freeport-McMoRan (FCX), one of the largest copper producers in the world, rose 25.1% in the week ended February 20, 2016, and closed at $6.92. Freeport rose in three out of five trading sessions. In the beginning of the week, Freeport declared that it had reached an agreement with Sumitomo to sell a 13% stake in the Morenci mine for $1 billion as a part of its debt reduction plan. This news made the price of Freeport ride higher, as debt reduction is a good sign for equity prices.
Glencore and Alcoa rose last week
Glencore (GLNCY), the metals trading and mining giant, rose 18.4% last week and closed at $3.34. Glencore reached a multiyear low of $2.02 on January 13, 2016, and then started trending upward. Currently, Glencore is trading at 65.8% above the multiyear low it reached on January 13. Glencore’s plans for early refinancing supported its equity price in the week ended February 20.
Alcoa (AA), one of the largest aluminum producers in the world, started last week on a positive note. It rose in the first three trading sessions and then fell. Alcoa tried and failed to close above the important price level of $8 and ended the week at $7.87, a weekly rise of 2.3%. Since the beginning of 2016, Alcoa has fallen 20.3%.
BHP Billiton (BHP), the Anglo-Australian mining corporation, rose for the fifth consecutive trading week. In the week ended February 20, 2016, BHP Billiton rose 5.6% and ended the week at $23.98. According to Brazilian authorities, BHP Billiton and Vale have reached an agreement to pay compensation for the mine disaster that occurred in November 2015.
The SPDR S&P Metals and Mining ETF (XME) and the PowerShares DB Base Metals ETF (DBB), both base metal ETFs, rose 1.6% and 2.7%, respectively, in the week ended February 20, 2016.
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