In today’s briefing:
- Northern Star Placement: Secondary Sell Down by Gold Fields; Tight Discount
- Copper Prices to Rally To 11k USD/Ton Due To Grasberg Force Majeure
- Copper Tightens: Grasberg Disruption Pushes Market Toward $11k–13k/T
- Zijin Mining: US$100bn Breakout on Copper Surge, Valuation Still Offers Upside
- Anglo–Teck: A Deal Built on Fragility
- [IO Technicals 2025/39] Iron Ore Rally Wobbles as Policy Push and Supply Hiccups Already Priced In
- Oil futures: Crude extends gains as drone strikes on Russia escalate
- Nanshan Aluminium — A Southeast Asia Alumina Pure Play at a Discount
- Oil futures: Crude eases from highs, Russia disruptions eyed
- Cambodia Rubber Sector Gains Traction Amid Rising Domestic Demand
Northern Star Placement: Secondary Sell Down by Gold Fields; Tight Discount
- Northern Star Resources (NST AU) is looking to raise around US$725m in a secondary placement.
- The proceeds will be used to pay down Gold Fields.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Copper Prices to Rally To 11k USD/Ton Due To Grasberg Force Majeure
- A significant production impact from the suspension of its Grasberg Block Cave mine in Indonesia, following a deadly mud rush incident, could lead to a spike in copper prices.
- The force majeure in the Freeport Mcmoran (FCX US) mine will take out 700,000 tons of annualized production in the foreseeable future (>2.5% of global copper production).
- Copper players like Southern Copper (SCCO US), Antofagasta PLC (ANTO LN), and Teck Resources (TECK US) would be beneficiaries, while Freeport Mcmoran (FCX US) could be significantly affected.
Copper Tightens: Grasberg Disruption Pushes Market Toward $11k–13k/T
- Grasberg shock: Force majeure after mudflow cuts ~3% global supply; 50–60kt/month at risk; copper jumped to $10,300/t, near 2024 highs.
- Asian impact: Indonesia’s downstream push stalls; Chinese smelters squeezed by collapsing TCs; Japanese/Korean smelters face higher costs; miners and traders gain leverage.
- Winners: +$1,000/t adds ~6–8% EBITDA for Zijin, ~5–7% for Jiangxi; Japanese majors 15–45% exposed; Mitsui/Marubeni gain 0.5–2% via mine stakes/trading.
Zijin Mining: US$100bn Breakout on Copper Surge, Valuation Still Offers Upside
- Copper & Gold Torque: Zijin has crossed US$100bn market cap as copper tops US$10,300/t and gold nears US$3,770/oz, with shares up ~60% in 3M and ~83% in 12M.
- Spin-Off Catalyst: Zijin Gold International IPO raised US$3.2bn at HK$71.6/sh; on our quality-weighted view, fair value is ~US$38.5bn EV vs ~US$24bn at IPO.
- Valuation Upside: 2027E SOTP points to HK$34.8/sh base (+12%), HK$38–39/sh spot (+25%), and HK$39–41/sh bull (+30%); detailed Zijin Gold valuation in our companion report.
Anglo–Teck: A Deal Built on Fragility
- Glencore’s dual role as competitor and gatekeeper shifts bargaining leverage, making deal terms contingent on a rival’s consent.
- Cross-Continental reviews across Canada, Chile, and beyond create compounding risks of serial delays, amplified by political sensitivities over copper’s strategic importance and public opposition to foreign takeovers.
- The option of counterbids or merger breakup invites activists and bidders, fuelling uncertainty and volatility
[IO Technicals 2025/39] Iron Ore Rally Wobbles as Policy Push and Supply Hiccups Already Priced In
- Citi warns iron ore’s rally is overstretched, with policy support and supply disruptions priced in, leaving limited upside ahead.
- Managed Money participants are ramping up net long exposure, underscoring renewed bullish sentiment and rising confidence in stronger demand and price gains.
- Iron ore’s momentum is fading as Bollinger Bands and MACD flash bearish signals, with sellers gaining control and downside risks rising.
Oil futures: Crude extends gains as drone strikes on Russia escalate
- Crude oil futures were challenging monthly highs Wednesday, extending the previous session’s gains as investors eyed threats to oil supplies, including Russian diesel, after the latest spate of refinery attacks.
- Front-month Nov25 ICE Brent futures were trading at $69.13/b (2010 BST) versus Tuesday’s settle of $67.63/b, while Nov25 NYMEX WTI was at $64.86/b against a previous close of $63.41/b.
- Benchmarks have largely been rangebound in September with markets torn between supply disruptions and concerns over a Q4 supply glut as OPEC+ continues its unwinding program.
Nanshan Aluminium — A Southeast Asia Alumina Pure Play at a Discount
- Volume growth: Capacity rising from 3 mtpa to 4 mtpa by early 2026 supports double-digit EPS growth.
- Margin strength: >50% gross margins and net-cash balance sheet provide resilience despite alumina cyclicality.
- Valuation appeal: Trades at 7–8× FY25E P/E and ~5× EV/EBITDA, a discount to regional peers.
Oil futures: Crude eases from highs, Russia disruptions eyed
- Crude oil futures eased back from multi-week highs Thursday amid profit taking but remained at the top end of the summer trading range.
- Front-month Nov25 ICE Brent futures were trading at $68.80/b (0945 BST) versus Wednesday’s settle of $69.31/b, while Nov25 NYMEX WTI was at $64.45/b against a previous close of $64.99/b.
- Prices slipped after hitting the highest levels since July on what was put down to profit-taking, but concerns over Russian supplies continued to underpin the relatively elevated levels.
Cambodia Rubber Sector Gains Traction Amid Rising Domestic Demand
- Rubber exports rebound in July, lifting Cambodia’s monthly earnings
- Domestic consumption surges 76%, reshaping supply-demand dynamics
- Smallholder reforms push sector toward increased efficiency
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