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Highlights
- The global commodity prices shot up on Monday after western countries including the UK, US and EU imposed further economic sanctions on Russia targeting the Central Bank of the Russian Federation (CBR).
- Aluminium future prices hit an all-time high of US$3,525 per tonne on the London Metal Exchange on Monday and are on the path to gain 13% in February, which will be the biggest monthly rise since 2010.
The global commodity prices shot up on Monday after western countries including the UK, US and EU imposed further economic sanctions on Russia fueling worries about supplies. The UK government has prohibited British individuals and businesses from making any transaction with the Russian central bank, the Ministry of Finance of the Russian Federation, and the Russian wealth fund.
© 2022 Kalkine Media®
Russia and Ukraine are among the world’s largest commodity producers, especially, metals, oil & gas, both base metals, and specialty metals. The Brent crude oil increased by around 4% to over US$100 per barrel and Chicago Wheat prices jumped by around 5%, as investors turned to commodity markets to hedge against the growing volatility.
Aluminium futures prices hit an all-time high of US$3,525 per tonne on the London Metal Exchange on Monday and are on the path to gain 13% in February, which will be the biggest monthly rise since 2010, while LME nickel prices surged by 1.3% to US$24,670 per tonne. Russia accounts for around 7% of global nickel mine supplies and produces around 6% of the world’s aluminium.
The rising aluminium prices are favourable for the companies operating in the segment. Let us look at some FTSE-listed aluminium stocks.
- Rio Tinto Plc (LON: RIO)
It is the second-largest metals and mining company in the world and is engaged in the production of aluminium, copper, iron ore, gold, uranium, energy, and minerals. Its aluminium business includes aluminium smelters, alumina refineries, bauxite mines that are located in Guinea, Australia, and Brazil.
The company reported an increase in Underlying EBITDA by 58% to US $37,720 in FY2021, from US $23,902 in FY2020, and has declared a total dividend of 1,040 US cents per share for FY2021.
Rio Tinto Plc’s market cap stands at £70,736.75 million, and its shares closed trading at GBX 5,791.00, up by 2.19%, on 28 February 2022.
Also Read: Lloyds, Barclays, HSBC, NatWest: Should you hold these FTSE stocks?
- BHP Group Plc (LON: BHP)
BHP Group Plc is a multinational resource company that is engaged in the development, discovery, and manufacturing of oil and gas, Aluminium, silver, iron ore, copper, and other natural resources, with operations in around 90 locations. Its shares are also listed on the Australian Securities Exchange, New York Stock Exchange, and Johannesburg Stock Exchange.
Recently, the company has announced a record US$7.6 billion dividend payout, equivalent to a 78% payout ratio in half-year ended 31 December, with underlying attributable profit from continuing operation of US$9.7 billion, up by 57% as compared to US$6.20 billion for the six-month ending 31 December 2020.
BHP Group Plc’s market cap stands at £52,220.98 million, and its shares were trading at GBX 2,520.00, up by 1.92%, on 28 February 2022.
© 2022 Kalkine Media®
- Glencore Plc (LON:GLEN)
Glencore Plc is a global industrial metals and mining company that produces and markets over 60 commodities, through around 150 assets and operates in over 35 countries. The company has recently reported increase in revenue by 43% to US$203,751 in FY2021, from US $142,338 in FY2020 and its Adjusted EBITDA increased by 84% to US $21,323, from US $11,560 in FY2020.
Glencore Plc’s market cap stands at £57,910.88 million, and its shares were trading at GBX 442.15, up by 0.68%, on 28 February 2022.
Also Read: Russia hikes key rate to 20% amid sanctions from other countries
Note: The above content constitutes a very preliminary observation or view based on industry trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
