Lumber stocks are the biggest winners; Alcoa lowers its sales in the first quarter

The S&P 500 materials sector closed this week of trading in red, down 3.83%. the Materials Select sector SPDR (XLB) also recorded a 3.66% dip.

Most industrial metals stumbled on Friday amid fears China’s COVID lockdowns and rapid monetary tightening could suppress demand for metals and economic growth. According to Reuters, the LME’s three-month copper fell 0.7% to $10,213/tonne at 10:15 GMT, leading to its third weekly decline. LME aluminum was down 0.7% at $3,274/tonne, tin was down 2.1% at $41,960, while lead was flat at $2,401.50.

Earlier in the week, stocks of precious metal miners fell across the board as gold prices suffered from their biggest drop in three weeks as the benchmark U.S. dollar hit its highest level since March 2020. Gold futures, for June delivery, fell 2.1% for the week, settling at $1,934.30/oz. Silver futures fell nearly 6% for the week.

Meanwhile, lumber prices recovered the crucial $1,000 per thousand board feet level, reversing some of their March losses as seasonal demand began to pick up.

“Prices for the essential building product may continue to rise through the summer months due to historically low inventory and a seasonally strong period for lumber as the homebuilding season heats up” , said an industry executive.

Take a look at this week’s top gainers among basic materials stocks (market capacity of $300 million or more):

  • West Fraser Timber (WFG) +12.28%; The wood products company this week announced a $1.25 billion share buyback plan.
  • Avenir (AVNT) +11.74%; The company hit a more than a month high on the back of better-than-expected first-quarter results and an agreement with Royal DSM to acquire the DSM Protective Materials business.
  • Sylvamo (SLVM) +9.22%; The paper company adopted a time-limited shareholder rights plan this week to protect the interests of all shareholders.
  • Resolute Forest Products (DP) +7.75%; The growth could be linked to the increase in wood prices.
  • UFP Industries (UFPI) +6.06%; The stock rose on better than expected first quarter results.

The week’s top declines among basic materials stocks (market cap $300 million or more) were:

  • Ramaco Resources (METC) -26.90% and Century Aluminum (CENX) -25.29%; both stocks were among the top 10 decliners in the energy and natural resources sectors. Crude oil futures fell for the third week in the past four.
  • Alcoa (AA) -23.44%; The stock fell on missed first-quarter sales, as aluminum production fell 9% year-on-year to 498,000 metric tons.
  • Endeavor Silver (EXK) -22.38%; The decline may be related to lower silver futures this week.
  • Hycroft Mining (HYMC) -22.28%

Other material 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).