Breaking Down the Mining News of the Day, Money of Mine

Money of Mine

Breaking Down the Mining News of the Day

An ex-underground miner, an ex-investment banker, and an ex-equity research guy breaking down the mining news of the day. It's a bit of entertainment, information, and occasionally some alpha.

Commodities

<ul><li>Champion Iron Ore, also known as Champ, is a premium producer in the iron ore sector with potential for increased attention over time.</li><li>Adriatic Metals is ramping up production at their Vares silver-zinc polymetallic deposit in Bosnia, but facing challenges with cash flow and development rates.</li><li>Cash flow issues, teething problems with mining services, and logistical challenges are hindering Adriatic's ramp up, but they are on track to reach their nameplate by Q4.</li></ul><p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.</em></p>

Champion Iron Ore, also known as Champ, is a premium producer in the iron ore sector with potential for increased attention over time.Adriatic Metals is ramping up production at their Vares silver-zinc polymetallic deposit in Bosnia, but facing challenges with cash flow and development rates.Cash flow issues, teething problems with mining services, and logistical challenges are hindering Adriatic's ramp up, but they are on track to reach their nameplate by Q4.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Energy Transition | AI | Shifting World Order, Mint Finance

Pranay Yadav

Energy Transition | AI | Shifting World Order

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

<ul>
<li>Weakness Persists: Iron ore prices hovered at critical support level of $100/ton on consistent ample supply &amp; weak demand driven by China's slowing manufacturing sector.</li>
<li>Options Market Shift: Despite overall bearish sentiment, the options market showed increased call activity, particularly for front-month expiries, indicating potential short-term bullish speculation.</li>
<li>Production &amp; Supply Outlook: Major producers like Vale &amp; Rio Tinto are expected to increase iron ore output, contributing to a bearish outlook due to ample supply in global markets.</li>
</ul>


Weakness Persists: Iron ore prices hovered at critical support level of $100/ton on consistent ample supply &amp; weak demand driven by China's slowing manufacturing sector.
Options Market Shift: Despite overall bearish sentiment, the options market showed increased call activity, particularly for front-month expiries, indicating potential short-term bullish speculation.
Production &amp; Supply Outlook: Major producers like Vale &amp; Rio Tinto are expected to increase iron ore output, contributing to a bearish outlook due to ample supply in global markets.


[IO Weekly 2024/30] China’s Manufacturing Slowdown & Strong Supply Continue to Pressure Iron Ore

<ul>
<li>The lack of specific stimulus from China's 3rd plenary meeting and minor rate cuts led to a 2.5% decline in iron ore prices, highlighting market disappointment.</li>
<li>Despite a 13.7% MoM increase in iron ore imports, market concerns arise from stockpile accumulation rather than domestic consumption, suggesting potential future import slowdown.</li>
<li>SGX Iron Ore options showed a bearish trend with a weekly volume put/call ratio of 2.1 and notable put option increases for September and October expiries, indicating market pessimism.</li>
</ul>


The lack of specific stimulus from China's 3rd plenary meeting and minor rate cuts led to a 2.5% decline in iron ore prices, highlighting market disappointment.
Despite a 13.7% MoM increase in iron ore imports, market concerns arise from stockpile accumulation rather than domestic consumption, suggesting potential future import slowdown.
SGX Iron Ore options showed a bearish trend with a weekly volume put/call ratio of 2.1 and notable put option increases for September and October expiries, indicating market pessimism.


[Iron Options Weekly 2024/29] China’s Plenary Meeting and Rate Cut Fail to Enthuse Iron Ore Markets

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

<ul>
<li>Iron ore has remained rangebound between 95 and 130 USD/ton for three years, with cost-curve support kicking in on the higher cost curve at around 100 USD/ton.</li>
<li>Last week, quarterly operational updates released were for <a href="https://api.mziq.com/mzfilemanager/v2/d/53207d1c-63b4-48f1-96b7-19869fae19fe/7d5a19cc-4fa7-7ce9-a947-44dcefea9f27?origin=1" target="_blank" rel="noopener">Vale</a>, <a href="https://www.bhp.com/-/media/documents/media/reports-and-presentations/2024/240717_bhpoperationalreviewfortheyearended30june2024.pdf" target="_blank" rel="noopener">BHP</a>, <a href="https://www.angloamericankumba.com/~/media/Files/A/Anglo-American-Group-v5/Kumba/press-releases/2024/q2-2024-production-and-sales-report.pdf" target="_blank" rel="noopener">Kumba</a>, and <a href="https://www.mtgibsoniron.com.au/wp-content/uploads/2024/07/MGX-June-Quarter-2024-Activities-Report-Final.pdf" target="_blank" rel="noopener">Mount Gibson.</a> Except for BHP, all companies were disappointed due to provisional pricing impacts and mix changes.</li>
<li>Read our recent production preview <a href="https://www.smartkarma.com/insights/fortescue-metals-group-fmg-au-high-dividend-yield-of-9-what-to-expect-from-q4-fy24" target="_blank" data-smartkarma-citation="insights:151567" rel="noopener">Fortescue Metals Group (FMG AU): High Dividend Yield of 9%, What to Expect From Q4 FY24,</a> to be declared on the 25th of July. </li>
</ul>


Iron ore has remained rangebound between 95 and 130 USD/ton for three years, with cost-curve support kicking in on the higher cost curve at around 100 USD/ton.
Last week, quarterly operational updates released were for Vale, BHP, Kumba, and Mount Gibson. Except for BHP, all companies were disappointed due to provisional pricing impacts and mix changes.
Read our recent production preview Fortescue Metals Group (FMG AU): High Dividend Yield of 9%, What to Expect From Q4 FY24, to be declared on the 25th of July. 


Iron Ore Tracker July 22nd, 2024: Doing The Dance Between 95-130 USD/Ton, Use Iron Condors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a> trades at a steady dividend yield of 9%, assuming a 115 USD/ton iron ore price and an 80% payout. </li>
<li>The payout risk lies in incremental capex spend on green energy in future years. For FY24, the company has committed USD 500 mn  (overall capex 3.0-3.2 bn USD). </li>
<li>We expect shipments of ~54 million tons for Q4 FY24 (in its production report to be released on 25th July) and 192 million tons for FY24 (flat YoY).</li>
</ul>



Fortescue Metals (FMG AU) trades at a steady dividend yield of 9%, assuming a 115 USD/ton iron ore price and an 80% payout. 
The payout risk lies in incremental capex spend on green energy in future years. For FY24, the company has committed USD 500 mn  (overall capex 3.0-3.2 bn USD). 
We expect shipments of ~54 million tons for Q4 FY24 (in its production report to be released on 25th July) and 192 million tons for FY24 (flat YoY).


Fortescue Metals Group (FMG AU): High Dividend Yield of 9%, What to Expect From Q4 FY24

Australia

Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, deep purple, to rusty red. The iron itself is usually found in the form of magnetite (Fe3O4, 72.4% Fe), hematite (Fe2O3, 69.9% Fe), goethite (FeO(OH), 62.9% Fe), limonite (FeO(OH).n(H2O)) or siderite (FeCO3, 48.2% Fe).

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Iron Ore (IRON ORE COMDTY)

Miners at Peak Risk/Reward

Champion Iron Ore is a premium iron ore producer gaining attention, while Adriatic Metals faces challenges in ramping up production at their Vares...

Money of Mine

[IO Weekly 2024/30] China’s Manufacturing Slowdown & Strong Supply Continue to Pressure Iron Ore

Iron ore weakness persists with prices stable around $100 amidst China's manufacturing slowdown, increased call activity in the options market, and...

Mint Finance

[Iron Options Weekly 2024/29] China’s Plenary Meeting and Rate Cut Fail to Enthuse Iron Ore Markets

China's recent economic measures failed to lift iron ore markets following disappointing 3rd plenary meeting. Despite a rate cut and increased...

Mint Finance

Iron Ore Tracker July 22nd, 2024: Doing The Dance Between 95-130 USD/Ton, Use Iron Condors

With iron ore continuing to remain rangebound between 95-130 USD/ton for the last 3 years (with minor overshoots), we summarize actionable ideas in...

Sameer Taneja

Fortescue Metals Group (FMG AU): High Dividend Yield of 9%, What to Expect From Q4 FY24

We summarize our expectation from Fortescue Metals Q4 operational report to be declared on the 25th of July and the annual results on the 28th of...

Sameer Taneja

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