In today’s briefing:
- Junior Copper Miners: Many Juniors Are Lagging Copper Price YTD
- Japan’s Semiconductor Export Controls Disrupt Global Supply Chain, Ministry Says
- China’s Steel Industry Faces Sharp Drop in Profits Amid Rising Costs and Weak Demand
- Portfolio Update: April 2024
- The Hardman & Co Monthly: May 2024
Junior Copper Miners: Many Juniors Are Lagging Copper Price YTD
- Our insight 2024 High Conviction: Junior Copper Miners garnered significant interest in late 2023, we hereby provide another update on our favorite junior copper names.
- Copper prices have started to tick up (+16% YTD) on squeezed global supply and BHP Group Ltd (BHP LN) making an offer for Anglo American (AAL LN).
- Entree Resources (ETG CN) has performed strongest +29% while Arras Minerals (ARK V EQUITY) has been a laggard at -12% YTD.
Japan’s Semiconductor Export Controls Disrupt Global Supply Chain, Ministry Says
- The export controls on certain semiconductor products proposed by the Japanese government will severely undermine the stability of the global supply chain and affect trade between the two countries, China’s commerce ministry said on Monday.
- Japan last week proposed to expand restrictions on exports of some technologies related to semiconductors or quantum computing, requiring companies to seek government approval for such exports.
- The change will take effect as early as July, after a period of public consultation until May 25. Calling the measures “erroneous practices,” the ministry urged Japan to rescind them and pledged to take necessary measures to safeguard the legitimate rights and interests of Chinese enterprises.
China’s Steel Industry Faces Sharp Drop in Profits Amid Rising Costs and Weak Demand
- The profits of China’s iron and steel enterprises fell by nearly half year-on-year in the first quarter, and the average profit margin was a mere 0.58%, according to China Iron and Steel Association (CISA).
- The steel industry’s biggest problem is low margin, CISA deputy secretary general Chen Yuqian said at a press conference Tuesday.
- Steelmakers’ revenue fell faster than the drop in production costs, as iron ore prices remained high, while sales declined and steel prices saw a consistent drop.
Portfolio Update: April 2024
I recently came across a thought-provoking blog post by Andrew Walker on his YAVB discussing the possibility of a bubble forming in quality stocks.
Although Andrew acknowledged that the title might be seen as provocative, he raised valid concerns about the potential challenges of achieving satisfactory returns in the future by investing in quality-growth-at-a-reasonable-price stocks, given their lofty valuations.
As an example, he pointed to Costco, which is presently trading at a P/E ratio of 50 despite its long-term expected growth rate only slightly surpassing that of the US GDP.
The Hardman & Co Monthly: May 2024
- Feature article: Is silver the cheapest asset on the planet?
- Silver is a precious metal, a monetary metal and an industrial metal with a surprisingly wide range of uses.
- It’s not that well understood by investors and tends to get overshadowed by gold – but, perhaps, not for much longer.
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