Kodal (KOD) & Anglo American (AAL): Should you buy these 2 metal stocks?

Highlights

  • Falling commodity prices caused the metals and mining sector to drop today
  • Anglo American’s shares fell over 7 per cent due to slump in metals prices

Metals and mining companies were impacted on Monday by falling base metals prices. Concerns over China’s economic slowdown is the big fear as it accounts for about 50 per cent of global demand for iron ore, copper and other commodities.

Aluminium futures prices were at US$ 2,860.75, down by 0.41 per cent today at 11:54 AM BST, whereas copper futures were at US$ 9,110.25, down by 1.66 per cent.

A spokesperson for the UK government’s Department for Business, Energy & Industrial Strategy (BEIS) has reportedly said that the government is determined to secure a competitive future for the steel industry in the UK as energy prices have soared recently.

The country also plans to boost the renewable energy sector, where they can play a critical role in supplying world energy, whether in the form of fossil fuels, nuclear energy or renewables.

Let us take a look at 2 FTSE listed stocks in the metals and mining sector and how they have performed:

  1. Kodal Minerals PLC (LON: KOD)

FTSE AIM All-Share index firm, Kodal is lithium focused metals and mining development company. The company stated in its FY 2021 final results, it is focused on the development of its Bougouni Lithium project in Mali.

It also reported a loss before other comprehensive income in FY 2021 at £623,000, compared to a loss of £630,000 in FY 2020.

Share price and volume of Kodal Minerals PLC

(Image Source: Refinitiv)

Kodal’s shares were trading at GBX 0.37, up by 0.69 per cent on 20 September 2021 at 10:08 AM BST. Meanwhile, the FTSE AIM All-Share index was trading at 1,260.29, down by 1.21 per cent.

The company’s market cap is at £57.72 million, and its one-year return is at 435.71 per cent as of today.

  1. Anglo American PLC (LON: AAL)

FTSE 100 index listed firm Anglo American is a leading international mining company. The mining company was among the biggest fallers on the FTSE 100 index today after the slump in ore prices impacted the company’s shares adversely.

It had earlier reported the rough diamond sales value for De Beers' seventh sales cycle of 2021 to have a provisional value of US$ 515 million, up from US$ 514 million in cycle 6 of this year.

Share price and volume of Anglo American PLC

(Image Source: Refinitiv)

Anglo American’s shares were trading at GBX 2,386.50, down by 7.89 per cent on 20 September 2021 at 10:08 AM BST. Meanwhile, the FTSE 100 index was trading at 6,853.12, down by 1.59 per cent.

The company’s market cap is at £ 35,196.35 million, and its one-year return is at 20.29 per cent as of 20 September.         

Bottom Line

Companies in the metals and mining sector have enjoyed firming commodity prices in recent months, but investors are worried that the rally may end anytime soon, as seen by today’s fall in prices.

For investors who are willing to accept a certain degree of risk, they can choose to invest in the sector. Also, Kodal’s lithium focus can have long-term potential as lithium is a key component needed in EV battery manufacturing. Thus, investors looking to invest in forward facing metals and mining stocks can consider this as an interesting investment opportunity. However, one must be careful to time their investment well during this dip.

 

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