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Highlights
- Commodity prices rallied after Biden and Jinping spoke, raising hopes of improving relations between the two countries.
- Copper, Aluminium prices have been firming recently, boosting metals and mining stocks long term prospects.
Base metals and other commodity prices rallied today after US President Joe Biden and Chinese premier Xi Jinping spoke on the phone, raising hopes of a potential cooling of tensions between the two nations.
Copper prices are especially sensitive to relations between the two countries. Copper December futures were at US$ 4.3688, up by 1.94 per cent at 12:11 PM BST.
Aluminium also touched 13-year highs on Thursday and continued its rally today as well. The commodity was trading at US$ 2,910.25, up by 2.64 per cent at 12:20 PM BST.
Let us take a closer look at 2 FTSE listed stocks in the metals and mining sector that were trending today and how they reacted to the news:
- Kodal Minerals PLC (LON: KOD)
FTSE AIM All-Share index constituent Kodal Minerals is lithium focused metals and mining exploration and development company.
The company recently reported its FY 2021 results, wherein Kodal has primarily focused on progressing its mining license for the Bougouni Lithium project.
Kodal managed to reduce its loss before tax from £629,504 in FY 2020, to £590,864 in FY 2021.
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Kodal’s shares were trading at GBX 0.33, down by 1.52 per cent on 10 September 2021 at 09:26 AM GMT+1. The FTSE AIM All-Share index was trading at 1,296.42, up by 0.04 per cent.
The company’s market cap stood at £52.18 million, and its one-year return is at 282.86 per cent as of 10 September.
- SolGold PLC (LON: SOLG)
Main market listed firm SolGold is a copper and gold focused exploration company.
The company reported drill hole assays at its Tandayama-Ameríca porphyry copper and gold deposit at its Cascabel project. SolGold found 1,010m @ 0.55 per cent CuEq at drill hole 13.
Assay results for drill holes numbered 14 to 23 are currently pending, and for drill holes 24 to 27, drilling is currently underway.
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SolGold’s shares were trading at GBX 28.15, down by 0.18 per cent on 10 September 2021 at 09:39 AM GMT+1. The precious metals and mining sector index is trading at 20,738.93, up by 0.22 per cent.
The company’s market cap stood at £ 646.86 million, and its one-year return is at 5.42 per cent as of 10 September.
Bottom Line
Metals and mining stocks have gained due to the surge in commodity prices. The sector continues to have a positive long-term growth prospect.
Furthermore, hopes of a potential cooling of US-China tensions will play a key role in the future prospects of commodity focused stocks, especially copper and some sensitive ones for relations between the two nations.
Investors seeking to increase their exposure to this sector can consider Kodal. It has given 280 per cent of returns to shareholders in the past year. It is still trading 36 per cent below its 52-week high, indicating upside potential.
SolGold share prices can also boost since its Cascabel project offers significant growth potential. However, as SolGold is an early-stage mining company, and can be risky. Thus, investors must exercise caution prior to investing
