But despite these levels, the Mexican mining companies that are listed on the Mexican Stock Exchange (BMV) and that exploit these metals, did not see the same rebound in the stock market.
Just look at the actions of the mining group Industrias Peñoles, owned by Grupo Bal, which wiped out a third of its profits in the last 16 months. A similar story happened with Carlos Slim’s Frisco. However, not all missed out on the metals’ rally. Grupo México and Compañía Minera Autlán registered advances in the price of their shares of 14% and 31% in the same period.
One of the problems that has affected the price of mining companies in the markets is production and sale. Such was the case for Grupo México. “Costs were good, but mine production and sales were slightly lower than expected in an interrupted quarter,” analysts at financial institution Barclays said in a report.
Similarly, Peñoles “in recent quarters, production and sales have dropped considerably,” said Alejandra Vargas, an analyst at the financial institution Banco Ve Por Más. This is reflected in its report for the first quarter of this year, in which Peñoles reported a 9.1% annual drop in sales and a 51.8% annual drop in net income.
The directors of the mining companies have highlighted that the Russian-Ukrainian conflict accelerated the trajectory of the average prices of industrial metals, but Vargas pointed out that the rises in energy prices, the closures in China, one of the main consumers of metals, and the uncertainty due to the Russian invasion in Ukraine have impacted the costs of mining companies.
Even so, analysts maintain the expectation that the price of the mining industry will recover its positive streak. This is reflected in some target prices of some of the miners. For example, the consensus expects Peñoles to reach a price of 319 pesos per share, a potential increase of 49%; while Autlán could exceed 17 pesos per share, a potential of 13% for the next 12 months.