Daily Brief Energy/Materials: Pan American Silver, Iron Ore, Stanmore Coal, Asian Paints, Gujarat Mineral Development, Akzo Nobel India, Dic Corp, Crude Oil, Hercules Resources , PT Pertamina (Persero) and more

Pan American Silver (PAAS) delivered strong quarterly results, with higher commodity prices boosting revenues and lowering costs. Q125 EBITDA was US$330m, just 5% shy of the seasonally strongest Q4 number, as costs were markedly below and production was in line with quarterly guidance for both segments. The company maintained its FY25 operating outlook, which points to seasonally strong quarters ahead. PAAS also announced a proposed acquisition of MAG Silver (MAG), valuing the company at US$2.1bn. MAG owns 44% in a top-tier Juanicipio silver operation in Mexico. In this note, we provide an initial take on the transaction, while keeping our revised estimates and valuation of PAAS on a standalone basis.

• Iron ore futures surged to a six-week high as U.S.-China trade tensions eased, with both nations agreeing to sharply reduce tariffs for 90 days, boosting market sentiment and commodity demand. 
• Underlying demand remains weak, with China’s steel consumption pressured by a cooling property sector and ongoing structural shifts across its broader economic landscape. 
• On the technical front, the outlook is turning increasingly bullish as prices are holding above key moving averages. 

• In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run-up to the June 2025 index rebal event.
• We expect one change for ASX 20, one change for ASX 50, two changes for ASX 100, and one change for ASX 200. 
• The official index changes will be announced after the close on Friday 6th June 2025.

• Q4 FY25 volumes grew 1.8%, value declined; FY26 guidance is for low growth with 18–20% margins supported by integration and cost control.
• Grasim and JSW are aggressively expanding with large capex and dealer networks, intensifying pricing pressure in decorative paints.
• Stock corrected 15–20% but still trades at ~55x P/E, which remains expensive given slowing growth and rising competitive risks.

• GMDC delivered strong FY25 results with 8MT of lignite sales and Rs992 crore in EBITDA, its second-best performance.
• The company is focused on scaling lignite and coal volumes through new mines within Gujarat and Odisha. It also plans to diversify into rare earths and critical minerals. 
• While valuations appear slightly elevated, upside optionality exists from the revival of Akrimota power plant and operationalization of new mines.

• Akzo Nobel N.V. earlier announced its plans to exit India to focus on core markets where it holds a position of “differentiating scale.
• JSW Paints has reportedly entered exclusive talks to acquire Akzo India, edging out Advent–Indigo and Pidilite.
• Shareholders may tender in the open offer or stay invested for potential upside via JSW which has a long stellar track-record.

• Consolidated sales reached JPY262.1bn (+2.5% YoY), with operating profit at JPY13.1bn (+54.0% YoY), driven by market recovery.
• Segment sales varied, with packaging inks declining in Asia, while jet inks for digital printing increased significantly.
• Operating profit rose in Japan and overseas, supported by cost savings and stable sales prices across product lines.

• OPEC held its 2025 and 2026 demand growth forecasts steady. The IEA’s upward revision reflects a catch-up adjustment for 2024, not a fundamental shift in its forward outlook.
• The EIA raised its demand growth forecast by 7.8% for 2025 but cut estimates by 13.5% for 2026. Meanwhile, it raised supply forecasts and projected inventory builds for both years.
• The EIA expects Henry Hub prices to rise in 2025 and 2026 from current levels, though it revised its 2025 forecast 3.5% lower and lifted 2026 estimates by 4.3%.

• Hercules Site Services is a technology-enabled labour supply and recruitment services provider, specialising in the UK infrastructure and construction sectors.
• Hercules services are powered by a bespoke Personnel Management System, and a Mobile Recruitment app allowing agility and flexibility, ensuring the right builder is at the job in the right location.
• The Trading Update to March 2025, reported this week on 7 May, anticipates revenue to be more than 17% higher than last year at £54m, which is in line with market expectations. 

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Pertamina (Persero)
• In the US, retail sales eased to 0.1% m-o-m (0.0% e / 1.7% revised p) in April, driven by lower car sales (after a front-loaded surge in March), as well as declines in several categories of imported items including sporting goods and apparel.
• This was offset by higher spending at restaurants and bars, which accelerated for a second month.