In today’s briefing:
- Aussie Arbs: Trump Tariffs And MACs
- Tariff Doesn’t List Tire But Throws US Auto Industry Into A Tizzy
- Commodities Crash after Trump’s Tariff Nightmare
- Jindal Stainless: Near-Term Headwinds Appear to Be Well Factored
- [IO Technicals Weekly 2025/14]: IO Volatility Set to Rise Amid Trade Tensions
- Asia base oils demand outlook: Week of 7 April
- [US Nat Gas Options Weekly 2025/14] Henry Hub Retreats Amid Tariff Shock and Warmer Weather Outlook
- Reliance’s Campa Cola Comeback: Disrupting India’s Soft Drink Market
- Medco Energi – Earnings Flash – FY 2024 Results – Lucror Analytics
- [US Crude Oil Options Weekly 2025/14] WTI Dropped to Four-Year Low on Trump’s Tariffs
Aussie Arbs: Trump Tariffs And MACs
- Travis Lundy succinctly summarised the Trump Tariffs in Trump Team’s Weird Tariff Math – Not Meant to Be Negotiated. Do read his note.
- From an arb standpoint, most (all?) NBIOs will likely see a downward revision in pricing. Vote risk should also be reduced.
- Such tariffs on predominantly domestic businesses should not trigger material adverse changes (MACs) Down Under. But it is still a worthwhile project to dig a little deeper.
Tariff Doesn’t List Tire But Throws US Auto Industry Into A Tizzy
- White House said on March 26 that the 25% tariff would be applied to imported passenger vehicles
- Annexe II, which refers to tariff exclusions, mentions rubber
- Stellantis halts its Canada, Mexico production
Commodities Crash after Trump’s Tariff Nightmare
- *YTD our absolute return strategy is up 7,5% Commodities Crash after Trump’s Tariff Nightmare In his mission to re-shore critical industries, raise revenue for the U.S. and narrow the deficit, Trump rolled out aggressive tariffs on virtually all countries (except Russia, Cuba and North Korea).
- The new 10% tariff baseline is roughly triple the average US tariff rate before Trump reclaimed power in January and the calculation behind each tariff rates seems insane.
- “We will charge them approximately half of what they are and have been charging us,” Trump said of the reciprocal tariffs.
Jindal Stainless: Near-Term Headwinds Appear to Be Well Factored
- Management has lowered its volume and margin guidance over the last few quarters even as they have gradually lowered their export share to less than 10%.
- Despite a 40% drop from its high over the last few months JDSL trades at premium to its historic valuations. Significant investments in Indonesia to raise capacity is positive
- A 20-25% increase in volumes (through Indonesia investments) over the next 2-3 years coupled with 20% ROIC and Debt <1X EBITDA implies that premium valuations could sustain.
[IO Technicals Weekly 2025/14]: IO Volatility Set to Rise Amid Trade Tensions
- SGX Iron Ore Futures fell $2.78/ton WoW, closing at $99.45/ton on April 4 after breaching key support levels and trading in a wider $5.95/ton range.
- U.S.–China tariff escalation led to a MACD-confirmed downtrend and prices plunging below 100- and 200-day DMAs, signaling heightened bearish momentum.
- Despite sharp price drops, implied volatility declined across all deltas reaching new lows for the year, with skew falling to +0.5%.
Asia base oils demand outlook: Week of 7 April
- Asia’s base oils demand could fall in face of slumping crude oil prices and concern about slower-than-expected economic growth in the region.
- Concern about weaker demand cuts fundamentals-related support that could cushion against impact of falling crude oil prices.
- Concern about more muted demand and expected improvement in base oils supply in coming weeks would contrast with increasingly high base oils margins caused by lower crude oil prices.
[US Nat Gas Options Weekly 2025/14] Henry Hub Retreats Amid Tariff Shock and Warmer Weather Outlook
- For the week ending 04/Apr, U.S. natural gas prices fell by 5.6% on the back of Trump’s tariffs and warmer weather forecasts.
- U.S. natural gas futures continued to decline on 07/April (Mon), hovering around a seven-week low and extending last week’s 5.6% loss.
- Henry Hub OI PCR fell to 0.97 on 04/Apr from 0.98 on 28/Mar. Call OI increased by 5.3% WoW, while put OI grew by 5%.
Reliance’s Campa Cola Comeback: Disrupting India’s Soft Drink Market
- Reliance Industries (RIL IN) has relaunched Campa Cola with a disruptive INR 10 price tag, targeting Bharat through regional branding, aggressive retail margins, and deep distribution.
- Campa’s revival is shaking up India’s INR 50,000 crore soft drink market, challenging Pepsi and Coke with rapid share gains and frenzied rural demand.
- This is not nostalgia, it’s Ambani’s Jio-style FMCG disruption. Expect more brand revivals, deeper pricing wars, and a new cola war driven from the grassroots.
Medco Energi – Earnings Flash – FY 2024 Results – Lucror Analytics
- Medco Energi’s performance remained robust in FY 2024, with the company reporting stable earnings but improved cash flows.
- FCF was positive and net debt declined, supported by the disposal of Medco’s Vietnamese assets.
- Consolidated Net Debt/EBITDA was healthy at 2.3x.
[US Crude Oil Options Weekly 2025/14] WTI Dropped to Four-Year Low on Trump’s Tariffs
- WTI futures fell 10.6% for the week ending 04/Apr, driven primarily by President Trump’s tariff announcement, which was broader and more severe than markets had anticipated.
- The U.S. rig count fell by two to 590. The oil rig count grew by five to 489, while gas rigs dropped by seven to 96.
- WTI OI PCR fell to 0.88 on 04/Apr compared to 0.91 on 28/Mar. Call OI increased by 10.8% WoW, while put OI grew by 7.2%.
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