Daily Brief Energy/Materials: Orica Ltd, Copper, Iron Ore and more

In today’s briefing:

Australia: Last Look at Potential Passive Selling in February
Copper Tracker 10th Feb 2025: Comex Spreads Bullish, Commentary on China Improving
Iron Ore Tracker (10-Feb-2025): Rangebound / Pounding the Table On Fenix Resources (FEX AU)

Australia: Last Look at Potential Passive Selling in February

There are 6 stocks in Australia that could be deleted from global passive portfolios later this month, though the probability of deletion varies across the stocks.
If deleted, passive trackers will need to sell between US$234m-330m in the stocks. Impact is high at between 7-23 days of ADV.
The potential deletions have underperformed the S&P/ASX 200 (AS51 INDEX) over nearly every time period from 1 week to 3 months. Shorts have increased on all stocks recently.

Copper prices closed above $9,000 per ton once more and are poised for short-term gains as the outlook on China’s economic recovery becomes more favorable.
The COMEX spread has hit a 12-week high, nearly reaching $1,000 per ton, as traders expressed concerns about copper potentially being included in the Trump administration’s blanket levies.
We favor Southern Copper (SCCO US) and Antofagasta PLC (ANTO LN) due to their greater copper exposure, higher ROCEs, and robust long-term expansion strategies.

Goldman Sachs has upgraded its iron ore price forecast, highlighting rising near-term demand from China’s steel sector during the spring construction season and weather-related disruptions at Australian ports.
However, Goldman is bearish on iron ore for the second half (a consensus view), predicting a decline in China’s steel demand and the emergence of lower-cost supply.
We continue to pound the table on Fenix Resources (FEX AU). Read “Fenix Resources (FEX AU) Q2 FY25 Update: Close to Tripling Production.

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