On Thursday at noon, the stock exchange valuation of KGHM's business could be estimated at approximately PLN 51.5 billion. The sharp decline in share prices was influenced by the decline in the commodity market. Silver's weakness stands out in particular.
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Bad moods dominate the stock exchanges in Europe and Poland on Thursday. Most of the capital flows out of the market, which translates into declines in the quotations of the main indices. The most important index of the WSE, WIG20, was 1 percent at noon. in the red. Among the twenty largest companies, one was particularly important – KGHM.
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KGHM is experiencing strong declines on the stock exchange
By noon, the state-owned copper giant had recorded declines in shares of as much as 6.6 percent at the worst moment. Recently, KGHM had a similarly strong rally on the second day after the outbreak of the war in the Middle East.
Such a drop in share prices means an outflow of billions of zlotys. KGHM's stock market capitalization shrank by approximately PLN 3.6 billion in a few hours. On Thursday at noon it was estimated at approx. PLN 51.5 billion.
The decline in KGHM's quotations is part of a broader context – on Thursday, valuations of mining companies are falling all over the world. Commodity prices are the focus of investors' attention. Gold, silver and copper are clearly losing value. The latter two are particularly important for KGHM.
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Copper, which is the main product of KGHM's operations, is falling by approximately 3 percent on Thursday. On a weekly basis, the discount is 5%. The situation is even worse with silver, the price of which has dropped by 7% in recent hours.and in a week – by 15 percent.
KGHM shares are highly dependent on copper and silver prices
KGHM share prices are closely dependent on copper and silver quotations on world stock exchanges, because the sale of these metals is the main source of the company's income. When their market prices increase, investors expect higher company profits, which naturally increases the value of its shares, while declines in raw material prices usually drag KGHM's stock down.
Copper and silver are absolutely key to the company's operations, with copper being its core product, and silver, mined along the way, has become an extremely important factor in improving financial results in recent years.
KGHM is a giant on a global scale, occupying the leading position in the world among the largest silver mines and in the ranking of the largest producers of this metal. The company is also one of the leading copper producers in the world and the most important player in this sector in Europe, which makes it one of the pillars of Polish exports.
