Metals and Mining: Shining Past Week

NEW YORK (TheStreet) -- Shares of coal stocks Alpha Natural Resources (ANR), Cliffs Natural Resources (CLF) and Patriot Coal (PCX) ticked up higher to accumulate significant gains this past week. Yanzhou Coal Mining (YZC), Mines Management (MGN) and Gold Fields (GFI) were among the losers.

Alpha Natural Resources gained 15% last week after the company's board of directors approved a share repurchase program to buyback almost $600 million of its outstanding common stock. The company's chief executive said that this repurchase affirms a long-standing commitment to maximizing shareholder value.

Cliffs Natural Resources was up 13.2% after iron ore prices peaked to three-month highs. Cliffs, being the largest iron ore producer in North America, derives 62% of its revenue from the North American iron ore segment. Last week, iron ore prices hit three-month highs to reach above $180 per ton amid strong demand from China and fears of supply outages. Meanwhile, Patriot Coal accumulated 12.5%.

Harmony Gold Mining ( HMY) gained 10.9% after it announced positive 2012 production guidance. The company expects its output for 2012 between 1.45 million and 1.55 million ounces from almost 1.3 million ounces in 2011. Also, Harmony sees capital expenditure for the next financial year increasing by 16% to $505 million.

Silver producers Endeavour Silver ( EXK) and Coeur d'Alene Mines ( CDE) rose 10.7% and 9.8%, respectively. Steel major AK Steel Holding ( AKS) moved up 10.1%.

Peabody Energy ( BTU) surged 9.8% after Japan's Fair Trade Commission approved the joint Peabody Energy-ArcelorMittal bid for Macarthur Coal for an aggregate value of $5.02 billion. Meanwhile, a similar approval is being sought from China's Ministry of Commerce. ArcelorMittal ( MT) gained 3.2% last week.

Carpenter Technology ( CRS) increased 9.3%. On Aug. 26, the company went ex-dividend with shareholders being eligible for a dividend of 18 cents per share. Horsehead Holding ( ZINC) rose 9.3%.

Nucor ( NUE) soared 9% after Morgan Stanley recommended the stock as a defensive play with considerable upside in the steel sector. Morgan Stanley has raised the stock's rating to overweight from equal weight saying NUE's variable and low-cost structure, more solid balance sheet and high-dividend yield would limit its downside risk even in volatile trading. Arch Coal ( ACI) piled 9%.

Teck Resources ( TCK) increased 8%. Toronto-based DBRS Limited has upgraded Teck's credit rating upwards to BBB with a stable trend from BBB (low) citing improved financial position, reflecting decreased debt.

Cloud Peak Energy ( CLD) rose 7.3% after Dahlman Rose upgraded the stock to buy from hold with a price target of $24, indicating 26.2% upside from current levels. Analysts at Dahlman state that an improving Powder River Basin price coupled with favorable valuation underpin the upgrade.

Among majors, Alcoa ( AA), BHP Billiton ( BHP), Vale ( VALE), Rio Tinto ( RIO) and U.S. Steel ( X) accumulated 5.8%, 5.6%, 5.1%, 4.7% and 4.5% respectively.

Yanzhou Coal Mining was the top loser last week, shedding 8.4%. Mines Management followed, declining 3.6%.

Gold producers like Gold Fields and Randgold Resources ( GOLD) dropped 3.3% and 3.3%, respectively. AngloGold Ashanti ( AU) lost 2.2%. Last week, RBC Capital downgraded Randgold from outperform to sector perform.

The heavyweight South African gold miners Gold Fields and AU dipped last week after gold slumped. After cresting record highs, gold prices retreated 3.7% to $1,827.95 per ounce, as investors' appetite for other assets improved, diminishing the yellow metal's luster. Early last week, gold prices peaked to 52-week highs of $1,897.95 per ounce.

Additionally, the CME Group has raised margin requirements on gold trading at its Comex unit for the second time in August. As per the new change, the minimum cash deposit for borrowing from brokers to trade gold futures will rise 27% to $9,450 per 100-ounce contract in the speculative Tier-1 category. This increase follows an earlier increase of 22% to $7,425 on Aug. 11, 2011.

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