Canada’s steel and aluminum sector have already been targeted for steep tariffs. Craig Hutchison, Director, Equity Research, TD Cowen joins MoneyTalk to discuss how the current trade and economic uncertainty is impacting the global mining sector.
Transcript
Greg Bonnell: Earnings season has been our first glimpse into how many companies are navigating the current uncertainty we have in global trade.
Joining us now to discuss what we’ve been hearing from the mining sector is Craig Hutchison, Director of Equity Research with TD Cowen.
Craig, great to have you back. We’re talking mining. What have you seen so far in earnings season?
Craig Hutchison: Yeah. Thanks for having me back on the show. So going into Q1, I think the expectation across the board was Q1 was going to be a weak quarter. A number of factors driving that. It really came down to several companies have ramp-ups ongoing– Capstone (OTCPK:CSCCF), Ero (ERO), et cetera. And there’s some factors that are seasonal within mining, and some of it has to do with lower grades in Q1.
So for the most part, the expectation is the second half of this year will be stronger than the first. And that’s what’s played out so far. We’ve had about half our coverage universe report already. Most companies have reported what I would call in-line quarters, a couple of companies like Teck (TECK)– and we talk about some of the specific names– are already guiding to the lower end of their guidance of one of their core assets called QB2. Taseko (TGB) last week lowered their production guidance a little bit.
But for the most part, most of the companies are kind of coming in line with our expectations. Again, we’ve got another week or two to go here in the earnings season, so it’s not over. But by and
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