Daily Brief Energy/Materials: Archean Chemical Industries, Iron Ore, Gold, NioCorp Developments , Plains All American Pipeline, L.P., Sylvamo and more

• Archean Chemical Industries (ACI IN) is largest producer of Bromine and largest exporter of Bromine from India.
• The company is doing brownfield and greenfield capex in Bromine derivatives which are Margin accretive.
• Archean Chemical Industries (ACI IN)  is confident about 30% volume growth in FY25.

• Chinese real estate investments fell 10.1% in the first five months of 2024 YoY. New home prices fell at the fastest pace in more than 9.5 years in May.
• Fresh bank lending in China rebounded well expectations in May. Chinese banks issued 950B yuan (v/s 1.36T yuan issued last May) in new loans last month.
• China’s consumer inflation held flat in May amid feeble domestic demand, uneven economic recovery, and consumer confidence weakness.

• Be Careful Precious Metals Bulls Another friendly reminder that positioning in copper remains super speculative bullish – aka, there is much room for speculators to reduce their bullish bets again.
• The same can be said for gold and copper, but not for crude oil.
• Once again, there seems to be less demand than people realize – especially from China.

Since our initiation note in January, NioCorp has 1) raised c US$7.6m in debt and equity instruments, 2) de-listed from the Toronto Stock Exchange, 3) announced the results of a scoping study, which suggested that the adoption of a Railveyor system could lead to material savings in both capex and opex at its Elk Creek project as well as reducing the underground mine’s carbon footprint, and 4) announced that it has received a preliminary, non-binding indicative financing term sheet from the Export-Import Bank of the United States (EXIM) with respect to NioCorp’s application for US$800m in debt financing to develop the project. This note updates our valuation of NioCorp for all of the above as well as the construction of an aluminium-scandium master alloy line at the mine, the size and timing of future equity fund-raisings and rare earth oxide pricing assumptions.

• Plains All American reported its first quarter 2024 results, reaffirming its commitment to capital discipline, generating free cash flow, and returning capital to investors.
• The management highlighted an adjusted EBITDA of $718 million for the quarter and is optimistic about achieving its full-year EBITDA guidance of between $2.625 billion and $2.725 billion.
• These results align with the company’s February projections and are supported by strong underlying operations and strategic investments.

• Sylvamo’s stock has greatly appreciated since its spin-off from IP in 2021, with a recent price of $57 per share and total return of 135%
• The company is now valued at $2.4 billion with an enterprise value of $3 billion, making it an attractive value investment
• Factors contributing to its appeal include potential growth in Brazilian assets, the end of inventory destocking in North America, and expectations for improved earnings in Europe

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.