The dust has settled. The cacophony that was Black Friday is now over.
Last week we had been witness to some pretty good deals but also pretty intense consumers – proof of the power of marketing and our willingness to be convinced where to throw our money at. Some say that it’s just an evil system roping in gullible shoppers – CNN Money reports that major retailers, such as Target (NYSE:TGT) and Walmart (NYSE:WMT) were actually selling lower-quality products. You might get a bargain, but that appliance might only last you until next year, when it’s time to line up again. Still, sales are up, and so are these companies’ stocks.
And then there’s Cyber Monday, where people can still continue the shopping frenzy from the comfort of their own homes. The Los Angeles Times reports Amazon (NASDAQ:AMZN) having an “army” of robots, all ready to find your items in the warehouse, for faster packing and shipping.
But while the annual event has been good for the stock market, how has it been for base and precious metals? Did commodities gain from all these sale offers and discounts? Unfortunately, while everyone in the U.S. was excited at the prospect of holiday shopping, the rest of the world struggled to deal with prices of commodities slipping.
According to the Wall Street Journal, crude oil fell by 10.2% while natural gas fell by 6.1%. For metals, silver was down by 6.4%, and even gold slipped by 1.8%. Data from the London Metal Exchange between 27 and 28 November showed the following drop in three-month buyer prices:
- From $2,064 to $2,025 per tonne for aluminium
- From $2,110 to $2,090 per tonne for NASAAC
- From $6,560 to $6,460 per tonne for copper
- From $2,067 to $2,031 per tonne for lead
- From $16,350 to $16,150 per tonne for nickel
- From $20,350 to $20,200 per tonne for tin
- From $2,279 to $2,224.50 per tonne for zinc
There was no change for aluminium alloy, which was still at $2,020 per tonne.
Per Sky News, the decision by OPEC (Organization of the Petroleum Exporting Countries) not to sever the production of crude oil despite a “global supply glut” was the defining factor as to why the prices of base metals and precious metals have been affected. Since there is a surplus, the price of oil per barrel has decreased. This will carry over to consumer prices as well as commodities, hence the slump in the market.
As for mining companies, trading has been mixed. Sydney giants BHP Billiton (NYSE:BHP) experienced a decline by 6.75%, while Glencore (LON:GLEN) suffered a decline by 1.61%. According to the Australian Business Review, Glencore is taking a three-week Christmas break, partly due to the reported low coal prices in China. The company cannot currently match those prices, thus there is no room at the moment at its stockpiles for more production. BHP Billiton (BHP, Financial), on the other hand, is affected by the falling iron ore prices.
Russian company Amur Minerals Corporation (AIM: AMC), meanwhile, enjoyed a remarkable increase of 7.65% as investors anticipate the company’s imminent license approval to explore and produce Kun-Manie, its flagship nickel sulphide project. Sentiments are high regarding the viability of the project, with reserves recorded at more than 120 million tonnes of mineralization.
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Sources:
- http://money.cnn.com/2014/11/25/news/economy/black-friday-deals/index.html
- http://www.bidnessetc.com/30000-target-corporation-tgt-stock-up-on-record-sales/
- http://www.latimes.com/business/technology/la-fi-tn-amazon-warehouse-cyber-monday-20141130-story.html
- http://blogs.wsj.com/moneybeat/2014/11/30/lessons-from-oils-black-friday/
- http://www.skynews.com.au/business/business/market/2014/11/28/most-base-metals-fall-after-opec-decision.html
- http://www.theaustralian.com.au/business/low-coal-prices-in-china-forces-glencore-shutdown/story-e6frg8zx-1227137545554
