The S&P materials sector was +4.1% for the week, becoming one of the top gainers among the eleven S&P 500 sectors. The Materials Select Sector SPDR ETF (XLB) also ended the week in green, with a 3.7% growth.
Aluminum prices in London jumped at the start of the week following Australia’s announcement that it will ban exports of alumina and aluminum ores to Russia. Three-month aluminum (LMAHDS03:COM) on the London Metal Exchange rose 3.7% to $3,507 a tonne by 0940 GMT on Monday. The prices peaked to $3,675/tonne on Thursday before settling down at $3,590/ton Friday.
Nickel prices jumped 15% to their upper limit on Wed (Mar. 23), rising for the first time since trading reopened a week ago after the historic short squeeze. LME Benchmark nickel CMNI3 (LN1:COM) spiked by nearly $3K in just 20 minutes and was holding the 15% gain by 1200 GMT at $32,380/metric ton, according to Reuters.
By Friday, copper and aluminum prices edged lower in London trading as some investors booked profits, while volatile nickel prices fell over 5% after surging up to 9% and then dropping more than 7% in the first 45 minutes of trading.
Furthermore, Lumber futures (LB1:COM) in Chicago sank below $1,000 per 1,000 board feet for a sixth straight decline, the longest slump since January and capping the biggest weekly loss since July.
“The price decline is tied to the DIY [do-it-yourself] sector slowing down due to high lumber prices, with people spending their money on other things like travel,” Russ Taylor, president of Russ Taylor Global in Vancouver, told Bloomberg.
Take a look at this week’s top gainers among basic material stocks ($300M market cap or more):
- Alto Ingredients (ALTO) +22.16%; The specialty alcohol maker reported its Q4 results earlier this month. Its shares have climbed 24.56% over the past one year period and +35.14% YTD.
- Sigma Lithium (SGML) +20.88%; The Canadian mineral development company is well-positioned to capitalize on the surging demand for lithium-ion batteries and deliver significant returns in the medium run, most likely beginning in FY23, says a recent bullish SA analysis on the stock. Its shares have climbed 263.25% over the past one year period.
- Western Copper and Gold (WRN) +20.63%
- CVR Partners (UAN) +18.09% and Intrepid Potash (IPI) +18.00%; UAN and IPI, along with other major fertilizers, have seen recent growth as Russia’s invasion of Ukraine nears the one-month mark. Fertilizer prices have continued to surge as supply upheaval from low-cost exporter Russia has left governments struggling to secure crop nutrients.
A look at this week’s top losers:
- TMC the metals company (TMC) -42.32%; Shares of the Canadian mining startup fell after it reported widened annual losses.
- Worthington Industries (WOR) -14.09%; The stock plunged close to its YTD low after reporting FQ3 adjusted earnings of $1.13 that came in well below the $2.12 achieved in the prior quarter.
- West Fraser Timber (WFG) -13.00%; The drop is tied to the significant decline in lumber prices.
- Amyris (AMRS) -11.58%
- Benson Hill (BHIL) -10.89%
Other materials ETFs to watch: iShares Global Timber & Forestry ETF (WOOD), Materials Select Sector SPDR ETF, Vanguard Materials ETF (VAW), iShares Global Materials ETF (MXI), SPDR S&P Metals and Mining ETF (XME), VanEck Vectors Gold Miners ETF (GDX), iShares MSCI Global Gold Miners ETF (RING), Global X Copper Miners ETF (COPX).