The median market capitalization of companies in the metals and mining sector fell by 6.9% through June after two previous consecutive months of increases.
However, across the metals and mining companies analyzed by S&P Global Market Intelligence, market capitalizations remain 81.1% above year-ago levels at the end of June. The 25 largest metals and mining companies assessed held a cumulative market capitalization of $1.16 trillion as of the end of June, less than the top 25 metals and mining companies in May with a cumulative market value of $1.22 trillion. The three largest companies in the space — BHP Group, Rio Tinto Group and Vale SA — account for 36.5% of the market value of the top 25 in the sector.
The Market Intelligence analysis calculated percentage changes in market capitalization based on reported currencies, while the company rankings were sorted by values converted into U.S. dollars.
Six companies among the top 25 by market capitalization saw double-digit losses in market value during the period: Newmont Corp., Freeport-McMoRan Inc., China Molybdenum Co. Ltd., Zijin Mining Group Co. Ltd., PJSC Polyus and Barrick Gold Corp. While some also focus on other materials, all of these companies mine gold.
"The world's appetite for commodities is normalizing, with macro deleveraging in China and an easing U.S. fiscal impulse working together to sap the wind out of its sails," analysts with TD Securities wrote in a July 9 note about the outlook for base metals. "With tailwinds morphing into cyclical headwinds for industrial metals in the coming months, [London Metals Exchange] metals could increasingly come under pressure."
After hitting record levels in the summer of 2020, the price of gold dropped 6.6% in the first half as gains in the second quarter were primarily wiped out in late June. While some observers have been optimistic about the price of gold in the second half of the year, there are also numerous headwinds facing the sector.
During a recent webinar, Juan Carlos Artigas, head of research at the World Gold Council, said that while investment in gold is expected to see support in 2021, there could be challenges on the consumer side despite the potential of economic recovery and the recent price pullback in gold. Obstacles include the possible impact of COVID-19 variants weighing on things such as jewelry demand in key markets.
"We expect that the need for effective risk hedges will keep investment demand well supported, but gold's performance will also be influenced by the direction of interest rates and the robustness of the economic recovery," the World Gold Council concluded in its recent outlook on the second half of 2021.
A few mining companies saw modest market value gains in the period, including Saudi Arabian Mining Company (Ma'aden), Fortescue Metals Group Ltd., Hindustan Zinc Ltd. and Tata Steel Ltd.