Materials Analyst/Strategist, Janus Analysis

Gaius King

Materials Analyst/Strategist

Accelerating Tomorrow’s Independent Research

Boost Research

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Thematic (Sector/Industry)

<ul>
<li>China implements coal import caps specifically targeting Australian producers</li>
<li>Unclear as to how widespread these restrictions will eventually be</li>
<li>Thermal and metallurgical coal exports affected</li>
<li>Impacting ~A$8.4Bn of metallurgical coal exports; or 4.4% of national income</li>
<li>Thermal coal exports affected worth ~A$3.8Bn; or an additional 2% of national income</li>
<li>Collectively, thermal and metallurgical exports equate to ~0.9% of Australian annual GDP </li>
<li>Actions appear to be a response to blocking Huawei bidding for the 5G network</li>
<li>Recent Chinese cyber-attacks harden Australian Government's resolve</li>
<li>Expect similar Chinese measures (in time) to be applied to other commodities and industries</li>
</ul>


China implements coal import caps specifically targeting Australian producers
Unclear as to how widespread these restrictions will eventually be
Thermal and metallurgical coal exports affected
Impacting ~A$8.4Bn of metallurgical coal exports; or 4.4% of national income
Thermal coal exports affected worth ~A$3.8Bn; or an additional 2% of national income
Collectively, thermal and metallurgical exports equate to ~0.9% of Australian annual GDP 
Actions appear to be a response to blocking Huawei bidding for the 5G network
Recent Chinese cyber-attacks harden Australian Government's resolve
Expect similar Chinese measures (in time) to be applied to other commodities and industries


Confluence of Politics - China Bans Australian Coal Imports (Flash Note)

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/6358" target="_blank" data-smartkarma-citation="entities:6358:1">Zijin Mining Group Co Ltd H (2899 HK)</a>/<a href="https://www.smartkarma.com/entities/24628" target="_blank" data-smartkarma-citation="entities:24628:1">Zijin Mining Group (601899 CH)</a>  <a href="http://www.hkexnews.hk/listedco/listconews/SEHK/2018/0906/LTN20180906025.pdf" target="_blank">announced</a> a friendly, all-cash bid for <a href="https://www.smartkarma.com/entities/25784" target="_blank" data-smartkarma-citation="entities:25784:1">Nevsun Resources (NSU CN)</a> at C$6/share, a 26% premium to the unsolicited &amp; hostile bid from <a href="https://www.smartkarma.com/entities/25356" target="_blank" data-smartkarma-citation="entities:25356:1">Lundin Mining (LUN CN)</a> of C$4.75/share, and a 57% premium to the undisturbed price prior to Lundin’s <a href="https://www.nevsun.com/news/2018/may8/" target="_blank">first announcement</a> in April.  
The deal implies an equity value of C$1.86bn for Nevsun. The transaction requires a minimum of 66⅔% of Nevsun’s 302.6mn outstanding shares being tendered, including those held directly or indirectly by Zijin and its affiliates. Zijin currently owns 3.2mn shares or 1.1% of shares out.
Regulatory approvals required include: Canada's Investment Canada Act and the Competition Act, and China's National Development and Reform Commission, the Ministry of Commerce, and the State Administration of Foreign Exchange. Nevsun's CEO Peter Kukielski does not foresee any specific bottlenecks in securing these approvals. This offer appears priced to complete.

Zijin Mining Group Co Ltd H (2899 HK)/Zijin Mining Group (601899 CH)  announced a friendly, all-cash bid for Nevsun Resources (NSU CN) at C$6/share, a 26% premium to the unsolicited &amp; hostile bid from Lundin Mining (LUN CN) of C$4.75/share, and a 57% premium to the undisturbed price prior to Lundin’s first announcement in April.  
The deal implies an equity value of C$1.86bn for Nevsun. The transaction requires a minimum of 66⅔% of Nevsun’s 302.6mn outstanding shares being tendered, including those held directly or indirectly by Zijin and its affiliates. Zijin currently owns 3.2mn shares or 1.1% of shares out.
Regulatory approvals required include: Canada's Investment Canada Act and the Competition Act, and China's National Development and Reform Commission, the Ministry of Commerce, and the State Administration of Foreign Exchange. Nevsun's CEO Peter Kukielski does not foresee any specific bottlenecks in securing these approvals. This offer appears priced to complete.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Commodities and related stocks are on the rise. Crude oil, industrial metals, and lumber prices are all breaking out to new highs and related energy and materials stocks are reaping the benefits. We expect their outperformance to continue. In this week's report we highlight commodities and actionable associated stocks.

Commodities and related stocks are on the rise. Crude oil, industrial metals, and lumber prices are all breaking out to new highs and related energy and materials stocks are reaping the benefits. We expect their outperformance to continue. In this week's report we highlight commodities and actionable associated stocks.

Opportunities in Global Energy & Materials Stocks

Commodities Trading - Credit Risk

Alan Chong

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Commodities

We initiate our coverage of commodity research on Bondcritic and start with iron ore which has drawn investors' attention on its recent soaring prices on pollution curbs. This is one commodity that has defied the descending trend of other commodities recently such as Gold, Copper and Crude Oil.  The question is whether iron ore price momentum will continue into the second half of 2018. We track the benchmark iron ore with 62% Fe content (which is the industry standard specification assessed by Platts, Metal Bulletin &amp; The Steel Index) and expect iron ore prices to average USD55-60/ton for 2018.

We initiate our coverage of commodity research on Bondcritic and start with iron ore which has drawn investors' attention on its recent soaring prices on pollution curbs. This is one commodity that has defied the descending trend of other commodities recently such as Gold, Copper and Crude Oil.  The question is whether iron ore price momentum will continue into the second half of 2018. We track the benchmark iron ore with 62% Fe content (which is the industry standard specification assessed by Platts, Metal Bulletin &amp; The Steel Index) and expect iron ore prices to average USD55-60/ton for 2018.

Commodity Critic: Where Is the Iron Ore Price Heading?

<ul><li>Global mining stocks offer an attractive, mid-cycle pullback opportunity. From steel to copper and aluminum stocks, retracements over the past three months have stabilized at support, which we view as timely entry points that will lead to upside resumptions.  This report highlights actionable charts, sorted by market capitalization.</li></ul>

Global mining stocks offer an attractive, mid-cycle pullback opportunity. From steel to copper and aluminum stocks, retracements over the past three months have stabilized at support, which we view as timely entry points that will lead to upside resumptions.  This report highlights actionable charts, sorted by market capitalization.

Pullback Opportunities in Global Metals & Mining Stocks

United Kingdom

Anglo American PLC is a global mining company. The Company's mining portfolio includes bulk commodities including iron ore, manganese and metallurgical coal, base metals including copper and nickel and precious metals and minerals including platinum and diamonds.  Anglo American PLC has mining operations in Africa, Europe, North and South America, Asia and Australia.

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Anglo American (AAL LN)

Confluence of Politics - China Bans Australian Coal Imports (Flash Note)

China implements coal import caps specifically targeting Australian producers Unclear as to how widespread these restrictions will eventually...

Boost Research

Nevsun's Copper Solution for Zijin

Zijin Mining Group Co Ltd H (2899 HK)/Zijin Mining Group (601899 CH) announced a friendly, all-cash bid for Nevsun Resources (NSU CN) at...

David Blennerhassett

Opportunities in Global Energy & Materials Stocks

Commodities and related stocks are on the rise. Crude oil, industrial metals, and lumber prices are all breaking out to new highs and related...

Vermilion Research

Commodity Critic: Where Is the Iron Ore Price Heading?

We initiate our coverage of commodity research on Bondcritic and start with iron ore which has drawn investors' attention on its recent soaring...

Bondcritic

Pullback Opportunities in Global Metals & Mining Stocks

Global mining stocks offer an attractive, mid-cycle pullback opportunity. From steel to copper and aluminum stocks, retracements over the past...

Vermilion Research

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