Key Insights
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Commodity rally continues, which is bullish for mining stocks.
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Recent report from Teck Resources shows that met coal realized prices reached record levels in the first quarter.
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Stocks of diversified miners will remain in demand in case commodity prices stay at current levels or move higher.
While most attention is focused on energy stocks today as WTI oil managed to get back above the $100 level, the rally is strong in various commodities. In this environment, it’s a good idea to take a look at diversified mining companies.
BHP Group
BHP produces copper, iron ore, met coal and other materials. The gained upside momentum at the start of this year and is up by more than 25% year-to-date.
Interestingly, BHP stock is still below its highs near the $98 level that were reached back in 2011. However, BHP shares will have a good chance to get to the test of these highs in case the current commodity rally continues.
Rio Tinto
Rio Tinto is another diversified miner which has gained from the recent developments in commodity markets.
In addition, Rio Tinto has finally managed to get closer to the solution of its problems with a copper mine in Mongolia. The company has recently made an offer to acquire full ownership in Turquoise Hill, which will allow it to get a 66% ownership in the mine, with the rest owned by Mongolia.
Teck Resources
Teck Resources stock is up by about 40% year-to-date, but it is still trading at about 6 forward P/E, which is cheap for the current market environment.
The company has recently provided an update on met coal sales volumes and realized prices, which showed record prices for steelmaking coal.
Teck Resources is enjoying strong tailwinds from high commodity prices this year, and the company’s stock has a good chance to develop additional upside momentum in the upcoming months.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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