Daily Brief Energy/Materials: CRH , Xanadu Mines, Gold, Base Oil, Aarti Industries, Iron Ore, Natural Gas, SGX Rubber Future TSR20, Crude Oil and more

• The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
• In this insight, we take a look at the upcoming constituent changes in the run up to the June 2025 index rebal event.
• We expect two regular changes in June 2025. There are also multiple live spin-off and M&A events which may trigger intra-review index changes near-term. Check the Leaderboards for those.

• Xanadu (XAM AU), a Mongolian copper-gold mining play, has entered a deal with Bastion, two weeks after an agreement with JV partner and major shareholder Zijin Mining (601899 CH) lapsed.
• Bastion, which comprises Singapore-based Baroo and Xanadu director Ganbayer Lkhagvasuren, are offering A$0.08/share in cash. Bastion is also subscribing for 286.8mn shares, at A$0.06/share, or 13% fully diluted. 
• The off-market Offer is contingent on a 50.1% acceptance hurdle. CAAF (11.85%) is supportive. No word on how Zijin (19.8% stakeholder, before dilution) will play this. 

• Steve Lowe, former managing director at Scotiabank, discusses his experience leading the iconic Scotia metals business
• Scotiabank’s success in the gold market was attributed to its broad scope and involvement in the physical business
• Focus on client service and cooperation among regions contributed to Scotiabank’s success in the gold market

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• Asia’s heavy-grade base oils prices hold firm versus feedstock/gasoil prices.
• Asia’s Group II light-grade prices slip vs feedstock/gasoil prices faster than heavy grades and faster than Group I light grades.
• Supply-demand fundamentals likely to improve for light and heavy grades in coming weeks as plant maintenance draws to a close and demand slows.

• Asia’s base oils demand could see earlier-than-usual seasonal slowdown in face of weak lube consumption and improving supply.
• Asia’s lube demand falls at end-Q1 2025 from year-earlier levels.
• Demand weakness shows signs of extending into Q2 2025 as uncertainty about US tariffs compounds signs of slowing economic growth.

• Aarti Industries (ARTO IN) posted a solid 9% QoQ revenue growth, driven by higher volumes in the energy sector.
• The company is navigating external volatility, including US tariffs and geopolitical uncertainty, while maintaining growth through volume recovery and diversification.
• The solid volume uptick in key sectors positions Aarti for continued growth in FY26, despite margin pressures.

• We summarize our gleanings from the Champion Iron (CIA AU) presentation, which captures the cost curve and other interesting details on the DRI market. 
• After declining below 100 USD/ton for 2 weeks, iron ore prices have slowly inched up towards 100 USD/ton, maintaining their level at the high end of the cost curve. 
• A 100 USD/ton level bodes well for the cash flows of the larger low-cost players like Vale (VALE US), Rio Tinto Ltd (RIO AU). 

• For the week ending 16/May, U.S. natural gas prices dropped by 12.2% on the back of mild weather, rising output, and lower LNG export flows.
• For the week ending 09/May, the EIA reported that U.S. natural gas inventories rose by 110 Bcf, moderately lower than analyst expectations of a 111 Bcf build.
• Henry Hub OI PCR remained unchanged at 0.92 on 16/May compared to 09/May. Call OI increased by 3.5% WoW, while put OI grew by 3.3%.

• US$16.9 mn initiative to enhance productivity and quality in Northeast  
• Stress on sheet-making infrastructure to fetch better price for farmers  
• INROAD creates over 136,000 new smallholders in the Northeast  

• WTI futures rose 1.6% for the week ending 16/May, aided by easing U.S.-China trade tensions and geopolitical tensions. Gains were capped by rising U.S. inventories and oversupply concerns.
• The U.S. rig count fell by two to 576. The oil rig count fell by one to 473, while gas rigs also fell by one to 100.
• WTI OI PCR grew to 0.82 on 16/May compared to 0.81 on 09/May. Call OI dropped by 27.4% WoW, while put OI fell by 26.7%.