CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
MarketWatch’s Myra P. Saefong tests the theory: Whenever there is general equity weakness and risk aversion miners underperform, but when when markets turn around, miners usually make strides far outpacing underlying metals prices.
6 Comments
jamesont
I don’t quite understand the question…
Ricscott
Frik Els
In many quarters that use to be theory, to dump metals for miners, not any more. I know you will say but miners profits will hold up with increased tonnages to compensate for lower pricing models, especially in the bulk commodity stocks. The world is running a different race now with more speculators than ever, with the advent of modern communication and liquidity extremes in most hard and soft commodities. The world builds faster, and predictability less certain. Markets will intervene to make any theory history.
Mrkhrdr
What worries me about mining stocks is that their value depends on factors other than the prices of the commodities they produce. Furthermore, these risks can be hard to predict, especially when the projects involved are located in far-flung regions with sketchy social social conditions. Strikes, revolutions, governments that decide out of the blue to confiscate properties, or to back out of their commitments, etc. etc. The price of commodities will depend on market conditions, which are a little more amenable to analysis and depend less on intangibles. I suppose the risks of mining investments can be ameliorated by spreading your portfolio across companies developing a variety of mining and producing sectors.
Mrkhrdr
P.S. Could we please stop using the word “miners” to refer specifically to mining companies? When we see that word in print, those of us who think of the folks in hard hats and coveralls moving dirt are the miners get just a little confused. A little more precision would be helpful. There are mine owners, mining corporations, and mineworkers, for instance.
Masentle Tsotetsi
Yes, mining companies sound better than miners….
C.B.
@Mrkhrdr, you made very good points.