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Metals, mining companies grow market caps a median 5.1% in February


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Metals, mining companies grow market caps a median 5.1% in February

The market value of the world's top metals and mining companies rose a median of 5.1% in February after increasing 2.1% in January.

Year over year, the median market capitalization increased 136.5% across the metals and mining companies analyzed by S&P Global Market Intelligence. The 25 largest companies assessed held a cumulative market capitalization of $1.124 trillion as of Feb. 26. The analysis calculated percentage changes based on reported currencies, while the company rankings were sorted by values converted into U.S. dollars.

Market capitalization across the seven largest mining and metal companies rose in February. The two largest by market value, BHP Group and Rio Tinto, grew 13.1% and 11.7%, respectively.

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Through February, 17 of the top 25 metals and mining companies increased in market value. Some of the largest gains in the period, on a percentage basis, were reported by First Quantum Minerals Ltd., Zijin Mining Group Co. Ltd. and Freeport-McMoRan Inc.

B. Riley Securities analysts increased their price target on Freeport-McMoRan stock from $32 to $42 in a Feb. 23 note, based on an increased "probability that we have entered a new copper supercycle catalyzed by increasing demand from developing economies and renewable energy applications."

"Copper experienced the largest rise [among base metals] as investors increasingly perceive the metal to be among the biggest beneficiaries of the trend towards renewable energy and electrification, while COVID-related lockdown measures in South America have helped to keep supply in check," the B. Riley analysts said.

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Companies that recorded a double-digit decrease in market capitalization in February included Barrick Gold Corp., Ganfeng Lithium Co. Ltd., Wheaton Precious Metals Corp. and Franco-Nevada Corp.

Most of the top mining companies had a higher market capitalization year over year at the end of February. Three companies involved in the gold sector were the only ones that decreased in value over the year: Barrick, Franco-Nevada and Newcrest Mining Ltd. Gold prices struggled through February and eventually broke below $1,700/oz in early March after a monthslong decline from recent highs of over $2,000/oz in August 2020.

"The gold market is giving back the pandemic gains," James Steel, chief precious metals analyst with HSBC Securities (USA) Inc., wrote in a March 4 note. "The drop below USD1,700/oz leaves the market looking fragile."

Gold market observers have pointed to higher bond yields and a stronger U.S. dollar as reasons for the decline in the gold price, and Steel noted that the Treasury's benchmark 10-year yield is approaching pre-pandemic levels, a "sobering" trend for gold bulls.

"Further yield gains could throw gold and the other precious metals lower," Steel wrote.