The general pricing level of resources stocks listed around the world has now moved up to the best levels seen since October 2008, as investors and other increasingly search for value, as the global economic crisis increasingly recedes on tickets for speeding, and for speeding against the traffic flow.For one, strategists at the Bank Credit Analyst have upgraded commodities to overweight, with energy at the top of the buy list. Among the key themes, commodities should benefit from both a weaker dollar, and a shift in investor portfolio preference toward real assets as a hedge against inflation. The upturn in BCA Research's global leading economic indicators is seen as another positive sign for the commodity complex.While supply-demand fundamentals remain idiosyncratic for each commodity, in singling out energy as top of the buy list, BCA Research argues that the rally in oil from the low $30s is technically impressive against the weak global demand backdrop and elevated inventories. Oil prices have touched $62/barrel recently despite lofty US oil inventories (notwithstanding recent inventory declines) and the fact that Americans are driving much less than last year.

The higher price of oil is seen as reflecting in part the upturn in Chinese oil imports and car sales at a time when oil production is lagging. Russia, states BCA Research, continues to have difficulty boosting output and oil production has been flat for most OPEC countries. Saudi Arabia has cut production sharply.As seen across most sectors on the global resources platform, with the key exceptions of gold and silver, cutbacks have been quick, invariably commencing during the final quarter of 2008, and have inevitably been severe, in adapting to new market conditions. During the first quarter of this year, Vale, global leader in iron ore mining for the seaborne trade, slashed its iron ore production by 37% to 46.9mt, compared to the first quarter of 2008; pellet production was down 73% to 2.9mt. All else being equal, commodity prices have experienced various degrees of price preservation, given a but for situation, but the losses for some individual commodities remain deep.METAL PRICES

Low*

High*

Current

From low

From high

Precious, USD/oz

 

Gold

682.41

1006.29

953.43

39.7%

-5.3%

Platinum

744.25

2196.00

1149.75

54.5%

-47.6%

Palladium

160.75

478.50

234.50

45.9%

-51.0%

Silver

8.46

19.48

14.63

73.0%

-24.9%

Industrial, USD/lb

Copper

1.28

4.06

2.09

63.6%

-48.4%

Aluminium

0.58

1.53

0.65

12.7%

-57.3%

Lead

0.39

1.04

0.65

69.1%

-37.3%

Tin

4.40

11.17

6.19

40.7%

-44.6%

Nickel

4.01

11.48

5.80

44.5%

-49.4%

Zinc

0.47

1.02

0.69

46.1%

-32.3%

* 12-month

 

Recoveries for listed resources stocks have varied, sometimes in line with supply-demand fundamentals, in translating into pricing changes. A stock sample of 995 listed stocks covering the broader resources sector, worth an aggregate $3.5trn, moved to fresh seven month price highs on Monday. Stock prices for the world's top 100 miners, by market value, are now 123% above lows, generally seen in October 2008, measured on a weighted average basis. Multi-year lows in stock prices, seen earlier this year, as in the MSCI world equities USD index, a broad global benchmark, have bounced by 38%, while the MSCI emerging markets USD index has gained 67%.The world's 100 hottest mining stocks, with a minimum market value of at least $20m, and an aggregate value of $138bn, have soared by 277% from lows, measured on a weighted basis. Fresnillo, the London-listed Mexican silver (and other metal) miner is among these, with a bounce of 642% from its low point, along with fresh stock price highs this week, and a current market value of $7.9bn.Given the relatively small number of primary listed silver miners, where the investible market value is $19bn, Fresnillo's performance goes a long way to explaining why the primary silver subsector leads the recovery for global mining stocks. Silver bullion prices have soared by 73% from low prices, far outstripping the price increases for other precious, and also, base, metals.Recoveries in base metal prices are led (after relatively small member lead) by copper, with a gain of nearly 64% from lows, to more than half the price of all time highs see around mid-2008. Among listed stocks, however, specialist zinc miners have outpaced their copper peers in recovering, led by the likes of Sichuan Hongda, Shenzhen Zhongjin, Hindustan Zinc, CBH Resources, and Yunnan Chihong.Among the copper subsector, price leaders include Northern Dynasty (copper, gold and other), Tongling, Con't Mines, (copper, gold and other), Corriente, Yunnan Copper, Jiangxi Copper, and Philex. Price gains for Chinese mining stocks have also been assisted by the general rise across stock markets in that country; the broad CSI 300 has now risen by 71% from its low points.Among listed stock subsectors, silver names have attracted the biggest net positive global investor portfolio flows over the past seven months, followed by names specialising in zinc, copper, gold and uranium. At the other end of the scale may be found specialist producer of oil sands products, oil, platinum, coal (outside Asia), and diamonds.GLOBAL LISTED RESOURCES STOCKS

Composite weighted 12-month net price gains/losses

Main

∆ From 2008

IMC*

Stock

result

October 10

USD bn

sample

Silver stocks

238.6%

285.1%

19.1

43

Tier II gold stocks**

245.8%

261.1%

49.8

18

Zinc stocks

137.1%

219.5%

25.4

45

Copper stocks

136.2%

197.6%

106.2

93

Tin stocks

110.0%

191.7%

2.9

12

Gold stocks

135.4%

186.4%

254.3

247

Uranium stocks

125.0%

180.8%

32.0

117

Nickel stocks

113.1%

176.4%

27.1

32

Tier I gold stocks**

113.9%

169.5%

178.0

13

Uranium producer stocks**

108.8%

167.6%

24.7

4

Tier I coal stocks (Asia)**

66.2%

149.6%

138.6

20

Tier II iron ore stocks**

72.0%

144.6%

76.8

19

Aluminium stocks

63.4%

136.4%

81.6

30

Coal stocks

 

56.3%

134.0%

290.4

96

Iron ore stocks

68.4%

132.1%

167.7

94

Tier I iron ore stocks**

67.7%

131.9%

97.7

3

Potash producers

59.3%

131.7%

97.1

12

Molybdenum stocks

55.8%

131.6%

10.5

20

Mining majors**

58.4%

126.2%

709.4

20

Silver ETFs

44.2%

118.6%

4.3

3

Diamond stocks

36.2%

112.9%

1.8

41

Tier I coal stocks (non-Asia)**

28.2%

102.0%

49.5

30

Gold ETFs

31.5%

96.5%

45.2

9

Platinum stocks

20.2%

87.8%

41.5

51

Oil stocks

12.7%

80.0%

1993.0

47

Tier I platinum stocks**

8.4%

79.9%

29.8

3

Oil sand stocks

-3.0%

63.5%

78.3

15

TOTALS

3229.0

995

* Investable market capitalization

** IMC counted in other sub-sectors

Source: Analysis by Barry Sergeant

Note: All samplings are operating companies, with the exception of ETFs

Note: the 12-month price gain/loss calculation assumes

1. A weighted amount of USDs are invested in each of 995 stocks

 

2. At the stock's lowest price in the past 12 months, and

 

3. That each stock is still held at the current date.