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DJ Basic Materials Roundup: Market Talk

· 02/06/2021 04:20

The latest Market Talks covering Basic Materials. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1654 GMT - Hochschild Mining's earnings benefited from stronger production in the fourth quarter at its Inmaculada mine, making up for weaker results at other mines, Peel Hunt says. The miner's throughput at the Argentinian mine topped 340,854 metric tons of ore, up from 327,906 tons in the prior year period, producing 43,550 ounces of gold. "This was mostly offset by a weaker result at San Jose in Argentina, but still led to a small net positive to our numbers," the brokerage says. Peel Hunt says it continues to see substantial potential upside and maintains a buy rating on the stock with a target price of 315 pence. (adriano.marchese@wsj.com)

1045 GMT - Anglo American stands out from its mining peers owing its exposure to platinum group metals and diamonds, which is attractive in the near term and offers more compelling growth, Berenberg says. The bank says it sees Anglo American as a defensive pick versus Rio Tinto and BHP, but that it prefers Rio Tinto over BHP in the near term on dividend upside. Berenberg initiates Anglo American with a buy recommendation and target price of 2,000 pence, while Rio Tinto and BHP are both placed at hold, with target prices of 6,000 pence and 2,000 pence, respectively. (sabela.ojea@wsj.com; @sabelaojeaguix)

1036 GMT - Johnson Matthey could face increased Chinese competition in the expanding electric-vehicle battery market, says Barclays, cutting its recommendation to underweight from equalweight and its price target to 2570 pence from 2640p. Barclays says Chinese battery producers are likely to benefit as key patents for lithium ferro-phosphate battery technology expire in the next year, allowing them to more easily export LFP batteries as well as produce them for domestic Chinese customers. "This expansion could shrink total addressable market estimates for producers of high-nickel cathodes like Johnson Matthey," Barclays analysts say. "In time, we expect high-nickel pricing in Europe to come under pressure too. JM looks most levered to this risk, with valuation close to peak." Shares fall 2.6% to 2932p. (philip.waller@wsj.com)

0933 GMT - Gold rises but is still on course for its worst week since the start of the year, as U.S. Treasury yields climb. Comex futures are up 0.9% at $1,807.50 a troy ounce, but the metal slumped below $1,800 an ounce on Thursday for the first time since November. Hopes for U.S. stimulus measures helped Treasury yields firm, weakening the appeal of gold as a haven asset. "The prospect of a juicy wave of government spending and borrowing sent longer yields higher," says Jeffrey Halley, market analyst at Oanda. "The risks are skewed towards more downside pain for a structurally long gold market as the weekend approaches," he says, adding that U.S. jobs data due out later Friday would be key. (william.horner@wsj.com)

(END) Dow Jones Newswires

February 06, 2021 04:20 ET (09:20 GMT)

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