Miners Bruised, but Standing Firm


". . .the top performances over the past 12 months have been generated by specialist primary silver miners. . ."

Resources stocks, measured by changes in the weighted value of 1,025 names listed around the world, touched eight-month peaks on 3 June, and were then heavily battered until a possible trough was made on Tuesday this week. These stocks, including oil names, are currently worth an aggregate of USD 3.3 trillion; the top 100 most valuable miners are currently valued at an aggregate of USD 1.3 trillion.

The selloff has been consistent with weaker metals prices across the board, which may also have made a possible trough two days ago. Apart from broader negative movements in western stock markets, it may also be worth noting the traditional quieter Northern Hemisphere period insofar as demand for raw materials is concerned.

The performance of the world's miners remains encouraging enough; where the very broad MSCI world equities USD dollar index has now bounced 39% above lows seen a few months ago, the top 100 mining stocks are currently 122% above lows, seen earlier, during the closing months of 2008. Mining stocks have more recently been given special support from the price performance of Chinese and also Indian miners, reflecting the very bullish behavior of broader stock markets in those countries.

Among metals, gold bullion retains its best relative price performance record, with few real rivals; for investors in equities, however, the yellow metal has now been trading in a relatively narrow band for more than a year, and is yet to make any convincing assault on its March 2008 record.

Among major base metals, copper continues to impress; few genuine copper diggers have cash costs higher than USD 1.25/lb; prices has been well above USD 2.00/lb for some months now.

Among listed mining subsectors, the top performances over the past 12 months have been generated by specialist primary silver miners, followed by zinc, copper, tin, gold, and uranium stocks. The least popular groupings include oil sands, oil, platinum, non-Asian coal, diamonds, potash and aluminum.

Since 3 June, when global mining stocks touched eight-month aggregate highs, the heaviest net selling has been seen among listed primary silver miners, followed by specialists in nickel, copper, potash, gold, and platinum.

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