SMM9 March 9: with the continued loose monetary policy around the world, as well as the interference of the epidemic, the tight pattern of global copper supply remains unchanged. As the epidemic was gradually brought under control and the speed of resuming work and production accelerated, copper prices rebounded in a V-shaped manner.
It is reported that the iPathA Series B Bloomberg Copper Subindex Total Return ETN (JJC) rose 8.1% before the beginning of the year, surpassing the 7.5% increase of the SPDR Seven P500. JJC has risen more than 35 per cent since its trough in March.
Through Power Rating, Foxnews selects three stocks that are bullish until the end of 2021 and rates them as "strong buys":
Rio Tinto
The mining and metals company has approved nearly US $200 million to finance the feasibility study of the Jadar lithium mine in Serbia and hopes to complete the research and design of the project by the end of 2021 with increased environmental awareness. The Jadar deposit contains advanced mineralized layers of boron and lithium, and geologists in Rio de Janeiro discovered a unique mineral jadeite near (Loznica) in the city of Loznita in western Serbia in 2004. The stock has risen more than 60 per cent since its March low. In the second quarter, the company's Pilbara iron ore (up 4 per cent year-on-year), bauxite (9 per cent) and IOC iron ore pellets and concentrates (9 per cent) all increased.
Rio Tinto's Kennicott plant in the United States was the first manufacturer to be awarded the Copper Mark.
The company also announced the first inferred mineral resources for the Winu copper and gold project in Western Australia and discovered a new gold-dominated mineralization area about 2 km east of the Winu deposit. With regulatory approval, the company aims to achieve its first production by 2023.
Southern copper industry
SCCO's cost competitiveness and financial position in the second quarter have been the main drivers of its rapid recovery. Shares in the copper mine and refinery have risen about 100% since their low in march and recently reached a 52-week high of $52.49. The company is expected to report earnings per share of $0.43 for the quarter ended September 2020, an increase of 7.5% over the same period last year. SCCO's EPS and revenue are expected to grow by 39.5 per cent and 10 per cent respectively by 2021.
Board Chairman Larrea of Germany said in his second quarter earnings report: "given the current environment and the impact of the COVID-19 pandemic, we believe that mining investment will play an important role in the recovery of Mexico and Peru. Therefore, we will continue to develop our projects, which is consistent with our belief that the operations of Southern Copper constitute the producers of risk-controlled economic resources. these economic resources provide rich jobs and taxes for the countries in which we operate. We reaffirm our intention to create long-term value for shareholders through competitive projects and cost reduction efforts. "
In the first half of 2020, SCCO's copper production increased by 2% compared with the same period last year, mainly because the new Toquepala concentrator and its expansion project increased Toquepala's annual copper production by 100000 tons. Net sales increased by 3.8% in the second quarter, and net income increased by 20.8%. EBITDA increased by 7.1% month-on-month. SCCO has the largest copper reserves in the industry, and many of the planned investments in Mexico and Peru look promising.
In the POWR scoring system, it is not surprising that SCCO was rated as a "force buy". For trade levels, buy and hold levels and equivalents, it is rated as level A, and for industry levels, it is rated as level B. It ranks fourth out of 33 stocks in the "industrial metals" category.
Free port
In order to achieve large-scale, low-cost copper and gold production, underground mining in the Grasberg mine area in Indonesia has increased, and FCX's initiatives in North and South America are encouraging. Shares in the mining company have risen about 140% since their low in march.
In the second quarter, FCX's operating income rose 872.7% year-on-year, to earnings per share of $0.03, compared with a loss of $0.050 per share in the same period last year. FCX's combined copper and gold sales exceeded estimates in April 2020. In addition, FCX plans to invest in new projects to increase production.
FCX expects third-quarter revenue of $3.48 billion, up 5.3 per cent from a year earlier. In addition, the company's earnings per share are expected to be $0.13 for the quarter, a significant improvement from a loss of $0.01 per share in the same period last year. By 2021, FCX's EPS and revenue are expected to grow by 452.2% and 29.2%, respectively.
FCX's POWR rating reflects this promising outlook. Its overall rating is "strong Buy", with trade level, buy and hold level and peer level as A, and industry level as B. It ranks fifth out of 33 stocks in the "industrial metals" category.
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