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

Commodities

<ul>
<li>Iron ore found no support at the 95-100 USD/ton range for the first time in a while and broke through it, gapping down 8.8% WoW to 92 USD/ton.</li>
<li>This break is a major short-term bearish signal for iron ore prices, as market participants would lose confidence in the theory of cost support at 95-100 USD/ton. </li>
<li>TSF data and mill margins ( -575 RMB/ton) from China also do not inspire much confidence in the near-term outlook for iron ore. </li>
</ul>


Iron ore found no support at the 95-100 USD/ton range for the first time in a while and broke through it, gapping down 8.8% WoW to 92 USD/ton.
This break is a major short-term bearish signal for iron ore prices, as market participants would lose confidence in the theory of cost support at 95-100 USD/ton. 
TSF data and mill margins ( -575 RMB/ton) from China also do not inspire much confidence in the near-term outlook for iron ore. 


Iron Ore Tracker (19-Aug-2024): Major Testing Point of 95 USD/Ton, Broken For Iron Ore

<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>Iron ore has remained rangebound between 95 and 130 USD/ton for three years, with cost-curve support kicking in on the higher end of the cost curve at around 100 USD/ton. </li>
<li>Coking coal prices are expected to bounce due to the Anglo incident, and we believe the 65-62 spread will benefit, moving out of its mid-teens band. </li>
<li>We like iron condors (set up details in the insight) and high-grade ore producers <a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio Tinto Ltd (RIO AU)</a>, <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" data-smartkarma-citation="entities:23731:1" rel="noopener">Vale (VALE US)</a>.</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 end of the cost curve at around 100 USD/ton. 
Coking coal prices are expected to bounce due to the Anglo incident, and we believe the 65-62 spread will benefit, moving out of its mid-teens band. 
We like iron condors (set up details in the insight) and high-grade ore producers Rio Tinto Ltd (RIO AU), Vale (VALE US).


Iron Ore Tracker July 4th, 2024: Prices Rangebound, Iron Condors Anyone?

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP (BHP AU)</a></strong>'s all-scrip <a href="https://announcements.asx.com.au/asxpdf/20240426/pdf/062w455d52h3cv.pdf" target="_blank" rel="noopener">unsolicited Offer</a> for <strong><a href="https://www.smartkarma.com/entities/anglo-american-plc" target="_blank" data-smartkarma-citation="entities:21798:1" rel="noopener">Anglo American (AAL LN)</a></strong>, zeroes in on AAL's copper assets as demand for the metal increases for use in EVs and renewable power.</li>
<li>The proposal has been labelled highly opportunistic by some shareholders and South African politicians. And that the value of AAL's Chilian/Peruvian copper mines are obscured by its sprawling business interests.</li>
<li>The Offer remains conditional and non-binding. A transaction hinges off AAL spinning off its South African iron ore and platinum businesses. Expect AAL to reject terms, but remain engaged. </li>
</ul>



BHP (BHP AU)'s all-scrip unsolicited Offer for Anglo American (AAL LN), zeroes in on AAL's copper assets as demand for the metal increases for use in EVs and renewable power.
The proposal has been labelled highly opportunistic by some shareholders and South African politicians. And that the value of AAL's Chilian/Peruvian copper mines are obscured by its sprawling business interests.
The Offer remains conditional and non-binding. A transaction hinges off AAL spinning off its South African iron ore and platinum businesses. Expect AAL to reject terms, but remain engaged. 


BHP/Anglo American: A Decarbonising Solution

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>LATAM allocations hit 10-year highs in active Global equity funds.</li>
<li>Notable increases in allocations include Ninety One Global Value (up 7.5%) and Ranmore Global Equity (up 6.7%), with smaller contributions from Lazard, Delaware, and JOHCM</li>
<li>MercadoLibre is the driving force behind the moves higher, and remains the conviction holding in the region.</li>
</ul>


LATAM allocations hit 10-year highs in active Global equity funds.
Notable increases in allocations include Ninety One Global Value (up 7.5%) and Ranmore Global Equity (up 6.7%), with smaller contributions from Lazard, Delaware, and JOHCM
MercadoLibre is the driving force behind the moves higher, and remains the conviction holding in the region.


LATAM Momentum:  Global Funds Raise Exposure

Brazil

Vale S.A. produces and sells iron ore, pellets, manganese, alloys, gold, nickel, copper, kaolin, bauxite, alumina, aluminum, and potash. The Company is based in Brazil, where it owns and operates railroads and maritime terminals.

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Vale (VALE US)

Iron Ore Tracker (19-Aug-2024): Major Testing Point of 95 USD/Ton, Broken For Iron Ore

Iron ore broke out of its 95-130 USD/ton level and is now 92 USD/ton. The short-term outlook looks bad as at this level confidence is broken in the...

Sameer Taneja

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

Iron Ore Tracker July 4th, 2024: Prices Rangebound, Iron Condors Anyone?

With the latest 10% bounce in iron ore prices and coking coal prices, we provide actionable ideas to play iron ore in equities/options etc.

Sameer Taneja

BHP/Anglo American: A Decarbonising Solution

When "Final" doesn't necessarily mean final. After BHP increased its (final) offer ratio terms by 24.8% to 0.8860 BHP shares for each Anglo share -...

David Blennerhassett

LATAM Momentum: Global Funds Raise Exposure

LATAM allocations hit 10-year highs in active Global equity funds. . MercadoLibre the driving force behind the moves higher, and remains the...

Steven Holden

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