Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>Following the recent COMEX-LME trade fiasco and the underwhelming TSF data, copper's market sentiment was positively influenced by Fed Chairman Jerome Powell's indication of a potential rate cut next month.</li>
<li>We anticipate that this development could drive copper prices on the LME above $10,000 USD/ton in the near term, before a subsequent reassertion of fundamental factors.</li>
<li>Earlier, there was downward pressure on copper prices due to China's softening economic performance and the rising levels of inventory in the market.</li>
</ul>


Following the recent COMEX-LME trade fiasco and the underwhelming TSF data, copper's market sentiment was positively influenced by Fed Chairman Jerome Powell's indication of a potential rate cut next month.
We anticipate that this development could drive copper prices on the LME above $10,000 USD/ton in the near term, before a subsequent reassertion of fundamental factors.
Earlier, there was downward pressure on copper prices due to China's softening economic performance and the rising levels of inventory in the market.


Rate Cut To Spur Copper Performance In The Short-Term to Over 10K USD/Ton

<ul>
<li>The company has been able to lower costs significantly by 12% YoY, improve on its byproduct credits by 37%YoY due to gold prices increasing, while copper prices rose 3.5% YoY.</li>
<li>Production for H1FY25 rose 10% YoY, led by a ramp-up in Centinala, resulting in EBITDA/profit improving by 60% YoY. </li>
<li>While the stock trades at 25x FY25e P/E, we believe that the runway for earnings improvement is enormous as the company ramps up its volumes and manages costs.</li>
</ul>


The company has been able to lower costs significantly by 12% YoY, improve on its byproduct credits by 37%YoY due to gold prices increasing, while copper prices rose 3.5% YoY.
Production for H1FY25 rose 10% YoY, led by a ramp-up in Centinala, resulting in EBITDA/profit improving by 60% YoY. 
While the stock trades at 25x FY25e P/E, we believe that the runway for earnings improvement is enormous as the company ramps up its volumes and manages costs.


Antofagasta (ANTO LN) H1 2025: Outperforming The Pack

<ul>
<li>By restricting the announcement of a 50% tariff on copper pipes/wiring and leaving out ores, concentrates, and cathodes, the Trump administration destroyed the COMEX-LME spread in one fell swoop. </li>
<li>COMEX prices have plunged, and the spread now is 150 USD/ton from the highs of almost 3000 USD/ton, with high inventories on the COMEX probably needing to be dumped. </li>
<li>Short term copper prices may face pressure, but we see an excellent outlook for the longer term, given the elevated China copper imports, which rose 18% YoY in July. </li>
</ul>


By restricting the announcement of a 50% tariff on copper pipes/wiring and leaving out ores, concentrates, and cathodes, the Trump administration destroyed the COMEX-LME spread in one fell swoop. 
COMEX prices have plunged, and the spread now is 150 USD/ton from the highs of almost 3000 USD/ton, with high inventories on the COMEX probably needing to be dumped. 
Short term copper prices may face pressure, but we see an excellent outlook for the longer term, given the elevated China copper imports, which rose 18% YoY in July. 


COMEX Spread Destroyed By Trump, Long-Term Copper Still Great

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Teck Resources Limited, a diversified mining and minerals company, reported its second quarter 2025 financial results, emphasizing its continued strategic goals of growth, operational excellence, and shareholder returns.</li><li>The company's performance exhibited both strengths and challenges across various segments.</li><li>Teck's financial results showed a moderate improvement in profitability, with adjusted EBITDA increasing by 3% year-over-year to $722 million.</li></ul>

Teck Resources Limited, a diversified mining and minerals company, reported its second quarter 2025 financial results, emphasizing its continued strategic goals of growth, operational excellence, and shareholder returns.The company's performance exhibited both strengths and challenges across various segments.Teck's financial results showed a moderate improvement in profitability, with adjusted EBITDA increasing by 3% year-over-year to $722 million.

Teck Resources: Is The Robustness In The Zinc Business Here To Stay?

<ul>
<li>In our previous insight, <a href="https://www.smartkarma.com/insights/trump-50-import-tariff-could-send-copper-into-stratosphere-short-term-lme-can-breach-11k-usd-ton" target="_blank" data-smartkarma-citation="insights:192880" rel="noopener">Trump 50% Import Tariff Could Send Copper Into Stratosphere Short-Term: LME Can Breach 11k USD/Ton</a>, we highlighted upside risk to the LME price.</li>
<li>Comex-LME spreads remain elevated at $ 2,500/ton levels, reflecting the impact of tariffs that haven't yet been imposed, amid ongoing supply disruptions. Inventories, though, have stopped depleting on the LME. </li>
<li>We remain bullish on copper in the countdown to August 1st, where it is likely that tariffs of 50% are imposed on copper. </li>
</ul>


In our previous insight, Trump 50% Import Tariff Could Send Copper Into Stratosphere Short-Term: LME Can Breach 11k USD/Ton, we highlighted upside risk to the LME price.
Comex-LME spreads remain elevated at $ 2,500/ton levels, reflecting the impact of tariffs that haven't yet been imposed, amid ongoing supply disruptions. Inventories, though, have stopped depleting on the LME. 
We remain bullish on copper in the countdown to August 1st, where it is likely that tariffs of 50% are imposed on copper. 


Bullish Copper: Comex-LME Spreads Off The Charts + Positive China TSF Data

Canada

Teck Resources Ltd. is an integrated natural resource group with activities in mining, smelting, and refining.  The Company mines zinc, copper, molybdenum, gold, and metallurgical coal in the United States, Canada, Peru, and Chile. Teck also produces refined metals, specialized metal products, and other products.

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Teck Resources (TECK US)

Rate Cut To Spur Copper Performance In The Short-Term to Over 10K USD/Ton

Copper has a new catalyst in anticipated rate cuts by the Fed. We believe that despite the high inventories, there is a good short-term setup for...

Sameer Taneja

Antofagasta (ANTO LN) H1 2025: Outperforming The Pack

Antofagasta (ANTO LN) is outperforming its peers based on improvements in production and costs. Coupled with a strong pricing environment for...

Sameer Taneja

COMEX Spread Destroyed By Trump, Long-Term Copper Still Great

Madness in the markets persist with Trump destroying the COMEX prices by showing leniency on pure copper imports. Despite this, the long-term...

Sameer Taneja

Teck Resources: Is The Robustness In The Zinc Business Here To Stay?

Teck Resources Limited, a diversified mining and minerals company, reported its second quarter 2025 financial results, emphasizing its continued...

Baptista Research

Bullish Copper: Comex-LME Spreads Off The Charts + Positive China TSF Data

Ahead of August 1st, the U.S. is set to impose a 50% tariff on copper imports. We analyze expected stockpiling on the COMEX and identify potential...

Sameer Taneja

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