Smartkarma Daily Briefs

• BHP has abandoned a last minute bid for Anglo American, which will likely see the latter’s planned merger with Teck with proceed 
• We consider other potential targets for BHP, all copper, concluding that most seem unlikely for now, especially with the company stating a focus on organic growth
• BHP faces the risks of a decline in iron ore (consensus) and copper (non-consensus) prices in our view, while it trades at premium to the sector and above our DCF 

• Factory visit to GUS Technology reveals Taiwan’s strategic position as a non-China battery supplier for defense and critical infrastructure applications.
• Proprietary pouch cell technology with patents in Taiwan and Japan addresses weight-sensitive applications including drones, underwater vehicles, and data center UPS systems.
• Dual product strategy (safety-focused Mettle Series and energy-dense Hyper Series) targets both commercial reliability and mission-critical performance markets.

Highlights

• MOFCOM imposes steep tariffs on Canadian, Japanese HIIR

• Domestic and Indian firms gain, but Indian gain may be short-lived

• Sinopec bets big on green high-end rubber materials

MOFCOM’s inquiry, launched in September 2024 at the request of domestic producers, found preliminary evidence that imported HIIR from the two nations had been sold in China at unfairly low prices, inflicting “substantial harm” on local manufacturers.

• New Zealand Energy, L&M Energy, and Genesis Energy have entered into a memorandum of understanding (MoU) to advance the Tariki gas storage project.
• The MoU establishes an exclusive framework for collaboration across technical studies, commercial negotiations, and project development milestones, ultimately leading to a final gas storage services agreement.
• This agreement will underpin the path toward a final investment decision, project completion, and commercial operations.

• Refining margins surged as diesel shortages deepened, driven by outages, sanctions, and shrinking Western capacity. Diesel-led product strength lifted refining margins even as crude stayed weak.
• The U.S. crack spread hit its 2025 high in November. Despite a brief correction, Europe’s structural tightness will keep the demand for diesel high.
• Europe’s sanctions, limited capacity, and winter demand will boost U.S. exports, keeping gasoline and distillate inventories tight despite temporary price corrections.

• Jetstream #4 has penetrated the entire interpreted helium-bearing interval encountering pressurized gas during drilling.
• Bottom-hole pressure measured ~674 psi at 444 m depth, rising to 887 psi at 578 m.
• These measurements align with the pressure regime observed at Jetstream #3, located 600 m to the north, where bottom-hole pressure was estimated at ~960 psi at 661 m depth.

• The M-6 vertical well has encountered 30 ft of net oil pay in the Carbonera C9 formation (previously named Guadalupe).
• This compares favourably with the results of the M-5 well that encountered ~ 26 feet of net oil pay in the same formation.
• This result provides a strong foundation for the first horizontal well at Mateguafa (M-HZ7), already spudded and expected to come onstream in December.

• On October 30, 2025, Thyssenkrupp AG (TKA) spun off 49% of its stake in its naval/-marine defense-systems business, TKMS AG & Co. (TKMS).

• TKMS stands out as Germany’s only full-systems provider for non-nuclear submarines, surface vessels and maritime electronics.

• The spin-off is part of a broader move by Thyssenkrupp to unlock shareholder value by simplifying its conglomerate structure.

• We maintain Overweight on the 2031s and 2032s for their attractive carry, meaningful spread pickup versus LatAm BB peers, and stronger downside protection at current discounted prices.
• We think credit metrics will remain stable, supported by strong liquidity covering maturities through 2027, easier-to-roll bank debt, and expected EBITDA improvement from recovering steel and resilient mining.
• We see potential spread compression from recovering steel prices, protectionist measures, asset-sale-driven deleveraging, and solid operating assets, reinforcing the bonds’ attractive relative value at current wide levels.

• Crude oil futures closed higher Wednesday amid volatile trade, with investors waiting for a response from Russia after Ukraine backed the revised US-brokered peace deal.
• Front-month Jan26 ICE Brent  futures were trading at  $63.05/b (1951 GMT) versus Tuesday’s settle of $62.48/b, while Jan26 NYMEX WTI  was at  $58.57/b against a previous close of $57.95/b.
• Benchmarks recovered after closing at the lowest levels in a month as investors priced in what was seen as significant progress towards a peace deal.