In today’s briefing:
- Champion Iron (CIA AU) Vs. Stanmore (SMR AU): Coal–Steel Mean Reversion Targeting 12%
- COMEX Spread Destroyed By Trump, Long-Term Copper Still Great
- Horizon Minerals Ltd – Digging and dealing
- Iron Ore: Pullback From 102 USD/Ton to 95 USD/Ton
Champion Iron (CIA AU) Vs. Stanmore (SMR AU): Coal–Steel Mean Reversion Targeting 12%
- Context: The Champion Iron (CIA AU) vs. Stanmore Resources (SMR AU) price-ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- Highlights: The trade targets ~12% return to the one-standard-deviation line.
- Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.
COMEX Spread Destroyed By Trump, Long-Term Copper Still Great
- 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.
Horizon Minerals Ltd – Digging and dealing
- Horizon Minerals Limited (ASX:HRZ) is an emerging junior gold producer with 1.8moz of gold resources located around the Kalgoorlie and Coolgardie regions of Western Australia.
- HRZ has released its June 2025 quarterly report which provides a progress update on mining, exploration and development activities.
- Revenue of $33.0m was generated from gold sales at Boorara with another $1.52m received as an early release from the Phillips Find JV.
Iron Ore: Pullback From 102 USD/Ton to 95 USD/Ton
- Following our bullish call on iron ore, Iron Ore: Small Bounce to 100 USD/Ton On Oversold Levels, we are now less excited on iron ore and see it drift lower.
- We expected iron ore to test the lower-end of the long-term band of 95-110 USD/ton (vs current spot of 102 USD/ton).
- While iron ore inventories/stocks at ports drift lower, mill margins have capped out and are not rising any further, leading us to call for a short-term decline in ore prices.
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