Daily Brief Energy/Materials: JX Advanced Metals, Copper, Rio Tinto Ltd, Crude Oil, SGX Rubber Future TSR20, Occidental Petroleum, Dynacor Group and more

• JX Advanced Metals (5016 JP)’s parent, ENEOS Holdings (5020 JP), is looking to raise around US$2.5bn via selling more than half of its stake in JXAM in its Japan IPO.
• JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
• We have covered various aspects of the deal in our previous notes. In this note, we will talk about the IPO pricing.

• JX Advanced Metals (5016 JP) has announced an IPO price range of JPY810-820 per share, which is 6.0%-4.9% below the IPO reference price range of JPY862.
• Relevant notes – JX Advanced Metals (5016 JP) IPO: The Bull Case, JX Advanced Metals (5016 JP) IPO: The Bear Case and JX Advanced Metals (5016 JP) IPO: Valuation Insights. 
• My SoTP valuation of JPY860 is modestly above the IPO price range, suggesting that the price range is fair. 

• On 3 March, JX Advanced Metals (5016 JP) announced that the IPO will be offered at ¥810 to ¥820 per share (down from the initial indicative price of ¥862 per share).
• Our base case valuation per share is ¥863 which is 5.8% higher than the mid-point of the expected IPO price range of ¥810 to ¥820 per share. 
• Given the lack of upside, we have a Negative view of this JX Advanced Metal IPO. 

• Base metals, particularly copper, are sensitive to China specific tariffs, leading to a rise in copper prices in early 2025
• Near term market outlook is cautious due to supply and demand dynamics, with prices potentially pulling back towards $9,000 per ton
• Long term outlook for copper market tightening in 2025 due to slowing mine supply growth and modest deceleration in global demand growth, with potential risks in X Chinese demand.

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• Discounts to NAV of covered holdcos didn’t follow a clear trend during February 2025. Discounts to NAV: C.F.Alba, 14.1% (vs. 12.9% as of 31 January 2025); GBL, 38.7% (vs. 40%);
• Heineken Holding, 13% (vs. 13.2%); Industrivärden C, 5.1% (vs. 3.0%); Investor B, 2.3% (vs. 4.5%); Porsche Automobile Holding, 38.1% (vs. 36%). Rio DLC spread tightened to 17% (vs. 20.3%).
• What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).

• How We Traded Wheat Short Wheat prices saw a small revival over the last month.
• From the rect bottom the forward futures contract recovered almost 15%.
• During last week new selling pressure started to effect the market and led prices down again. 

• U.S. oil and gas rig count rose by one for the week ending 28/Feb, marking the fifth straight weekly gain and bringing the total to 593.
• For the week ending 21/Feb, U.S. oil production slightly rose to 13.50 million bpd from 13.49 million bpd last week.
• The number of active U.S. oil rigs fell by 2 to 486, while gas rigs rose by 3 to 102. Rig count in the Permian rose by one to 305. 

• Chinese buying concentrated on warehouse cargoes
• Arbitrage narrows for international cargoes on wintering 
• Gradual return of the tire makers expected 

• Occidental’s Q4 revenue fell 5.7% YoY, missing estimates by 3.1%. It also posted a net loss of USD 297 million. Lower sales and tight margins weighed on performance.
• However, adjusted EPS climbed 8.1% to USD 0.80 per share, beating estimates by 18.1%, while Occidental met its USD 4.5 billion short-term debt reduction goal for 2024.
• Occidental signed divestment deals worth USD 1.2 billion in Q1 2025. Proceeds will cover debt maturities. It raised its quarterly dividend by 9% to USD 0.24 per share.

• DNG reported its 2025 guidance which includes revenue of $345-375M (+27% on realized sales) and net income of $14-17M.
• Dynacor has received EIA approval to begin construction of a 50,000tpd pilot plant in Senegal and plans to be finished construction by Q1/26.
• DNG plans $1B in sales by 2030, representing a ~3x from 2024E sales.