Although metals and mining stocks have seen an average 40 percent appreciation since the beginning of the year, the same sector was hit with declines of approximately 16 percent during the past few trading days.
According to the Wall Street Journal, “Among the biggest decliners on the session were several metals and mining companies, even though the price of several metals ended the session higher. Leading the move, Olympic Steel fell $9.77, or 14%, to $60.70, while RTI International Metals lost 3.99, or 11%, to 31.64 on the New York Stock Exchange.” The largest U.S. steelmaker, Nucor, saw shares drop another six percent — not a hopeful number at the end of the session, since Nucor already faced a 28 percent decline in the past two months.
Another big steelmaker, U.S. Steel, dropped four percent. Mexico’s largest mining company, Grupo Mexico SAB, fell to their lowest in five months, while there’s more upsetting news for Freeport-McMoPan, a large mining company: “Mining giant Freeport-McMoRan has lost 5 [percent], and threatens to slip back below the $100 mark,” Barrons reports.
These aren’t the only companies with problems, since several mining companies and steelmakers now have to deal with falling shares. In fact, analyst Rodrigo Heredia told Bloomberg last week that the majority of miners and steelmakers are falling. But although we are starting to see some cracks with steel raw material pricing, not everyone’s stocks have declined. Iron ore producer Cleveland-Cliffs just raised their outlook. How long will it last? That’s anybody’s guess.