Smartkarma Daily Briefs

• Malaysia imports tires worth US$816 mn a year; China pitches US$318 mn  
• Goodyear, Continental plant closures highlight Chinese competition  
• Recycling innovations aim to capture value and boost sustainability  

• Supply-Led Rally: Zinc has rebounded ~15% to ~US$3,000/t, driven by mine curtailments, smelter shutdowns, collapsing TCs, and low inventories.
• China Stimulus Tailwind: Beijing’s CNY 1tn package lifts sentiment for galvanised steel, which makes up ~60% of zinc demand, reinforcing price momentum.
• Valuation Impact: Hindustan Zinc justifies a premium on pure-play exposure, while Vedanta offers cheaper diversified optionality; sustainability of prices above US$3,000/t remains the key investor question.

• Styrenix, after returning to promoter control, is stepping up capacity expansion and riding demand tailwinds from ABS, SAN, PS driven by white goods, automotive, and packaging. 
• India’s demand for styrene‐based polymers is accelerating (styrene demand projected 15% growth in FY2025-26) and government policy (Atmanirbhar, petchem investment) is increasingly favorable.
• Styrenix offers a strong lever to India’s structural growth in engineering plastics, but valuation must account for margin cyclicity, FX exposure, and capex risk.

• Broadwood Partners opposes Alcon’s $28/share offer for STAAR, citing opportunistic timing and a flawed sale process.
• Alcon seeks STAAR to fill a portfolio gap in phakic intraocular lenses, potentially enhancing US market penetration.
• STAAR’s China sales decline attributed to inventory issues, with management predicting recovery by H2 2025.

• The crude oil market in September 2025 in a state of short-term equilibrium, where forecasts of oversupply are being counterbalanced by immediate and significant geopolitical disruptions to Russian oil supplies.
• Escalating geopolitical tensions, including the ongoing risk of expanded sanctions and persistent conflicts in the Middle East, are collectively driving current price increases, offsetting the longer-term bearish outlook.
• This range-bound market scenario, characterized by conflicting factors influencing prices, suggests that strategies focused on profiting from stable prices are more favorable than those based on strong directional trends.

Financially, Pan African Resources’ (PAF’s) FY25 results were characterised by record second half output, record EPS and a record (proposed) dividend. Operationally, they were characterised by a full half-year contribution from MTR/Mogale and maiden production from Tennant’s Nobles in Australia, both ahead of time and below budget. If the contract liability relating to PAF’s MTR/Mogale construction financing facility (effectively a synthetic forward sale) is adjusted out of revenue and into ‘other expenses’ and excluded owing to its exceptional nature, then normalised headline earnings per share (HEPS) were 7.0% ahead of our forecast, at 8.73c/share (see Exhibit 2), while the company’s dividend was increased by more than 50% to 2.10c/share. With the price of gold remaining high, we have upgraded our FY26 normalised HEPS forecast by 11.3%, to 13.21c/share. Note that, if it remains high for the full year, then our forecast (below) increases by a further 51.2%, to 19.98c/share. Simultaneously, PAF is seeking promotion for its listing from AIM to London’s Main Market.

Financially, Pan African Resources’ (PAF’s) FY25 results were characterised by record second half output, record EPS and a record (proposed) dividend. Operationally, they were characterised by a full half-year contribution from MTR/Mogale and maiden production from Tennant’s Nobles in Australia, both ahead of time and below budget. If the contract liability relating to PAF’s MTR/Mogale construction financing facility (effectively a synthetic forward sale) is adjusted out of revenue and into ‘other expenses’ and excluded owing to its exceptional nature, then normalised headline earnings per share (HEPS) were 7.0% ahead of our forecast, at 8.73c/share (see Exhibit 2), while the company’s dividend was increased by more than 50% to 2.10c/share. With the price of gold remaining high, we have upgraded our FY26 normalised HEPS forecast by 11.3%, to 13.21c/share. Note that, if it remains high for the full year, then our forecast (below) increases by a further 51.2%, to 19.98c/share. Simultaneously, PAF is seeking promotion for its listing from AIM to London’s Main Market.

• Nicola received six five-year mining lease extensions for its ~10,800ha New Craigmont Property.
• This significantly de-risks the project if exploration is successful in discovering a copper porphyry system.
• New Craigmont is a key asset for NIM, combining historic high-grade copper production and ongoing copper porphyry exploration.

• On September 3, 2025, Smackover Lithium, a JV between Standard Lithium (55%, operator) and Equinor (45%), announced positive results from the DFS for the South West Arkansas project.
• The project targets initial production capacity of 22,500 tons per year of battery-quality lithium carbonate at the Reynolds brine unit over a 20-year operating life.
• The unit is located in Columbia and Lafayette counties, Arkansas.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Medco Energi, Melco Resorts
• UST yields declined slightly, on account of a strong auction of 20Y notes. The UST curve bull-steepened, with the yield on the 2Y UST falling 3 bps to 3.50%, while the yield on the 10Y UST was down 1 bp at 4.03%.
• The rally in equities halted ahead of the FOMC rate decision later today. The S&P 500 and Nasdaq both declined 0.1% each to 6,607 and 22,334, respectively.