Daily Brief Energy/Materials: Steel, Copper, Wheaton Precious Metals, Nutrien , Cf Industries Holdings, Marathon Oil, TMC the metals co, Western Midstream Partners LP, Kolibri Global Energy and more

• China’s steel industry is facing significant challenges, including price drops, overcapacity, and government intervention
• Steel producers are preparing for potential consolidation and supply side reforms to address the industry crisis
• Iron ore prices have also been impacted by the challenges in the steel market, with expectations for lower Chinese imports and domestic output

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• During last week, the International Energy Association (IEA) as well as OPEC both announced that demand for oil is slowing, revising down previous demand forecasts for the year and beyond.
• The world is seeing a major deceleration in oil demand growth led by China, with inventories set to rise next year even if OPEC+ were to postpone its plans to ease output cuts, the IEA stated.
• Meanwhile, the growth from the US won’t be able to offset the slowdown from China, according to the agency.

• Wheaton Precious Metals has reported its second quarter results for 2024, demonstrating a robust financial and operational performance, reflecting the company’s successful business model and strategic asset management.
• The company generated $234 million in operating cash flows and reached a record of over $450 million for the first half of the year.
• Wheaton Precious Metals produced over 305,000 gold equivalent ounces year-to-date, keeping on track with the 2024 production guidance of 550,000 to 620,000 gold equivalent ounces.

• Nutrien recently reported its financial results for the first half of 2024, highlighted by mixed performances across its various segments.
• The company, a global leader in providing crop inputs and services, recorded an adjusted EBITDA of $3.3 billion, driven by increased crop input margins, strong global demand for potash, and lower operating costs.
• Potash segment performance was robust in terms of volume but faced challenges from lower benchmark prices which were partly offset by reduced production costs due to increased mine automation.

• CF Industries reported notable operational and financial results for the first half and second quarter of 2024, reflecting strong performance despite a mix of ongoing challenges and strategic advancements.
• The company, a major player in the nitrogen fertilizer industry, generated an adjusted EBITDA of $750 million for the quarter, bringing the figure to $1.2 billion for the half-year period.
• Key drivers included robust operational rates at ammonia plants, particularly the Waggaman facility which outperformed expectations, and significant strides in its decarbonization initiatives which include several carbon capture and sequestration projects.

• Marathon Oil Corporation reported its first quarter 2024 earnings with several important takeaways underlining its current and future financial health.
• The company successfully navigated the quarter, showcasing a strong financial and operational performance while continuing to make strategic enhancements to its asset base, aiming for a resilient and sustainable business model.
• In the past earnings results, Marathon Oil strongly emphasized its commitment to executing a capital-efficient strategy, delivering significant free cash flows, and providing meaningful returns to shareholders.

• 2Q24 costs increased Y/Y but declined Q/Q.
• TMC reported 2Q24 operating results that included higher exportation and evaluation expense of $12.4 million versus $8.1 million in 2Q23 due to increased spending on mining, technological and process development costs associated with increased engineering work with its offshore partner Allseas, and a modest increase in G&A expenses ($7.9 million versus $5.1 million in the year-ago period) due to higher share-based compensation and personnel costs.
• As a result, quarterly loss increased to $20.2 million from $14.1 million in 2Q23, with EPS of ($0.06) versus ($0.05) in 2Q23.

• Western Midstream Partners has recently reported a robust quarter, continuing its momentum into the second quarter of 2024.
• The company saw significant throughput growth, largely driven by the robust operability of its systems, setting records in the Delaware Basin for natural gas and crude oil, along with natural gas liquids.
• This marks the fifth consecutive quarter of records for these metrics.

Kolibri Global Energy (KEI) reported Q224 results that saw double-digit increases across all financial and operating metrics on a y-o-y basis, with production and EBITDA up 37% and 40%, respectively. Sequentially, EBITDA fell 7%, while netback was 5% higher at US$40/bbl. KEI has started drilling three new 1.5-mile lateral wells, slated for completion in early Q4. If successful, these wells could potentially see an up to 1.5x increase in production rates and lead to a change in the field development plan. We have updated our valuation to US$6.9/share as we await more details about the performance of the new wells and KEI’s next steps. The potential change in field development strategy is yet to be priced in by the market.