Anglo American shines over the last two weeks

Monday, 14th November 2022 11:45 - by Rajan Dhall

Anglo American (AAL:LSE) had a good week last week rising 13.54%. Commodities companies especially those in the base metals sector have been pretty unlucky of late. China is still dealing with the COVID-19 pandemic, and lockdowns persist due to the government's no-nonsense policy. China reported around 14,878 new COVID-19 infections (12th November), including a record number of new daily cases in the capital city Beijing, as well as in manufacturing hubs Guangzhou and Zhengzhou. This obviously means that the world's top consumer of base metals will be importing less. The base metals sector in general is feeling the effects.

Looking at some good news the strength in the US dollar seems to have eased slightly. The relentless rise in the greenback makes commodities more expensive. As the dollar pulled back this week most of the base metals rose nicely. That has had a good effect on the likes of Anglo American (AAL:LSE), Glencore (GLEN:LSE), and Rio Tinto (RIO:LSE). The recent CPI number dropped slightly below expectations and there was a Fed member who said the US central bank may pause with rate hikes at 4.5%. This spurred investment and risk-on mode kicked in again.

In company-specific news, A group of UN experts and a leading human rights organization will apply to play a role in court proceedings that could result in a judge approving a large-scale class action lawsuit against the London-based mining company Anglo American. It has been reported that an estimated 140,000 children and women of child-bearing age living in Kabwe are represented in the case, one of Africa’s largest class action cases.

In the firm's latest report, steel-making coal production jumped 28% to 5.5 million tonnes as the group ramped up longwall operations at its underground mines in Grosvenor and Aquila. The group reiterated its annual production outlook for diamonds but flagged that sales in the fourth quarter could be hit by the closure of cutting and polishing factories for holidays in India.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.