Metals and Mining

China has 60 days to negotiate its costly export restrictions on rare earths, used in advanced technologies from Smartphones to solar panels, as the EU, U.S. and Japan launch a case with the WTO to break its domination. Production capacity around the world has increased leading to falling prices of rare earths, but China still produces 90% of the global supply. We look at investor sentiment towards the miners of these elements.

Copper is trading close to six-month highs following heightened speculation that demand from the U.S. to China will strengthen at a time when stockpiles are at their lowest levels since August 2009, according to Bloomberg. We look at short interest and investor sentiment towards the copper mining stocks and main ETFs serving the sector.

This week’s earnings are fuelled by Energy, Metals and Mining companies as well as Autos and online players Zynga and Zip. We use securities lending flow data to identify the names around the world seeing the most short interest ahead of earnings.

 The cost of borrowing shares is on the rise globally and nowhere is this trend more obvious than in the South African equity lending market. But, in a reverse of what is going on in the wider world, institutional investors are buying more shares in South Africa’s banks thereby going against analyst recommendations. Big bets are also being made against the fortunes of Johannesburg listed platinum and iron ore players.

Stocks include: Kumba Iron Ore (JSE:KIO) and Anglo American Platinum (JSE:AMS)

The spot price of Uranium continues to track between $50 -$55 since its 30% decline following the Fukushima disaster. The FT has reported that the costs of extracting uranium are rising, and lower prices are affecting producers’ profitability and growth plans. We use securities lending flow to highlight how institutional investors have been building their stakes since the disaster in Japan yet short sellers have switched from targeting the main ETF to individual names.

There may be a rush to off load investment in metals following recent price volatility, but will this deter the growing, seemingly unmanageable problem of copper being stolen from the UK railways? Copper has fallen by 22% in September alone, reaching 14-month lows. Not far behind is steel, which is putting pressure on producers such as United States Steel (X), which is the fifth top faller out of all U.S.

Mining stocks around the world slipped into negative territory as China further tightened its monetary policy for the second time this year and due to the political unrest in the Middle East and North Africa. We look at investor sentiment towards; Rio Tinto (LON:RIO), BHP Billiton (LON:BLT), Anglo American (LON:AAL), Vedanta Resources (LON:VED), Antofagasta (LON:ANTO) and Seabridge Gold (TSE:SEA).