In today’s briefing:
- Copper Tracker August 19th, 2024: Markets Volatile, Accumulate Good Copper Names On Weakness
- Iron Ore Tracker (19-Aug-2024): Major Testing Point of 95 USD/Ton, Broken For Iron Ore
- The Mosaic Company: Enhanced Potash & Phosphate Projections & Their Expected Impact On The Top-Line! – Major Drivers
- Occidental Petroleum Corporation: Will The CrownRock Acquisition Be A Game Changer? – Major Drivers
- Select Water Solutions, Inc. – Water Infrastructure Segment Crosses 50% Margin Threshold
- Summit Materials: How Are They Dealing With Market Volatility in Cement and Aggregates & Other Challenges? – Major Drivers
Copper Tracker August 19th, 2024: Markets Volatile, Accumulate Good Copper Names On Weakness
- With increasing market volatility, base metals continue their rocky weekly performance. Copper is up marginally, taking it past 9000 USD/ton.
- Copper inventories continue to pile at the exchanges, with ~500k tons combined at Comex, LME, and Shanghai, up almost 7% in the last two weeks.
- We believe accumulating names like Southern Copper (SCCO US) and Ivanhoe Mines (IVN CN) with good long-term fundamentals is a great strategy.
Iron Ore Tracker (19-Aug-2024): Major Testing Point of 95 USD/Ton, Broken For Iron Ore
- 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.
The Mosaic Company: Enhanced Potash & Phosphate Projections & Their Expected Impact On The Top-Line! – Major Drivers
- The Mosaic Company’s second quarter 2024 earnings were a mixed set of results amidst striving for strategic and operational enhancements during a challenging operational backdrop.
- The company reported an adjusted EBITDA of $584 million and revenues of $2.8 billion, which, when compared with the previous year’s $744 million EBITDA and $3.4 billion in revenues, marked a noticeable decrease.
- This decline is reflective of the tougher conditions in the market yet shows resilience given the macroeconomic pressures and fluctuating demand patterns across different geographies.
Occidental Petroleum Corporation: Will The CrownRock Acquisition Be A Game Changer? – Major Drivers
- Occidental Petroleum Corporation exhibited strong execution and financial health in its Second Quarter 2024 earnings, marking numerous operational and strategic accomplishments that further consolidate its market position.
- The company reported its highest quarterly production in four years, both for the total company and U.S. onshore operations, significantly surpassing production guidance with a generation of $1.3 billion in free cash flow before working capital adjustments.
- This performance was mainly driven by remarkable execution across business segments, particularly in the Permian region, including new well performances and production uptime, as well as a robust showing in the Gulf of Mexico.
Select Water Solutions, Inc. – Water Infrastructure Segment Crosses 50% Margin Threshold
- Gross profit margin before D&A in Select’s Water Infrastructure Segment crossed the 50% threshold in 2Q24.
- Segment revenue totaled $68.6 million, a 24% increase from 2Q23 and gross profit before D&A totaled $35.0 million, a 68% Y/Y gain.
- Gross profit margin before D&A was 51%, compared with 46.9% in 1Q24 and 37.8% in 2Q23.
Summit Materials: How Are They Dealing With Market Volatility in Cement and Aggregates & Other Challenges? – Major Drivers
- Summit Materials has consistently demonstrated a focused approach toward operational excellence and strategic acquisitions, contributing to robust financial performance during the second quarter of 2024, despite challenging external conditions.
- The integration of Argos USA and other strategic acquisitions has played a pivotal role, enhancing Summit Materials’ foothold in high-growth markets and fortifying its balance sheet, reinforcing its ability to navigate through economic cycles with increased resilience.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
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