In today’s briefing:
- ASX200 Index AdHoc Rebalance Preview: Potential Replacement for Spartan Resources (SPR AU)
- Zijin Mining: Strong H1 Guidance, FY25 Upgrades Likely, Gold Listing Adds Catalyst
- IEX Powers Ahead: Volume Growth Signals Strong Q1 and Strategic Evolution
- Iron Ore: Mill Spreads Continue to Improve, Bullish Ore To 110 USD/Ton
- Provaris Energy Ltd – On the cusp of commerciality
- An Update on Gold: Time for a Pause?
- JSW Steel: Steady Output Amid Pricing Pressure; Record Volumes Likely Ahead
- Tata Steel – 1QFY26: Stable Output, Soft Deliveries Amid Planned Maintenance
ASX200 Index AdHoc Rebalance Preview: Potential Replacement for Spartan Resources (SPR AU)
- There will be an ad hoc inclusion for the S&P/ASX 200 (AS51 INDEX) at the close on 22 July following Spartan Resources (SPR AU)‘s acquisition by Ramelius Resources (RMS AU).
- There are a couple of stocks that are trading neck and neck on average free float market cap and one of them is likely to be added to the index.
- Both stocks have seen a big increase in cumulative excess volume over the last few weeks, indicative of positioning in the stock.
Zijin Mining: Strong H1 Guidance, FY25 Upgrades Likely, Gold Listing Adds Catalyst
- Zijin has guided for a 54% YoY rise in H1 FY2025 net profit to RMB 23.2 billion, driven by strong copper and gold pricing and volume gains.
- Based on this, we see scope to revise our FY2025 PAT and EPS estimates up by 16–19%, and EBITDA by 35–50%.
- The proposed listing of Zijin Gold International in Hong Kong could unlock value from its high-margin overseas gold assets and enhance investor visibility.
IEX Powers Ahead: Volume Growth Signals Strong Q1 and Strategic Evolution
- Volume Data: IEX volumes rose 15% YoY in Q1 FY26, led by strong RTM and Green Market growth.
- Near-Term Outlook: Higher volumes should lift Q1 earnings, with EBITDA and PAT expected to rise ~22%.
- Future Plans: IEX is launching new products like G-RTM and LDCs, and investing in P2P and smart grid tech.
Iron Ore: Mill Spreads Continue to Improve, Bullish Ore To 110 USD/Ton
- We had called iron ore Iron Ore: Small Bounce From 96 to 100 USD/Ton As China Mill Margins Turn Positive, and we are now at 99 USD/ton.
- We continue to see mill margins benefit and the restock in the chain, including coking coal, which has started to move up, and forecast a gradual uptick to 110 USD/ton.
- We express our bullishness through owning Fenix Resources (FEX AU), a small-cap iron ore miner (read: Fenix Resources (FEX AU): Q3 FY25 Concall Update + CZR News )
Provaris Energy Ltd – On the cusp of commerciality
- Provaris Energy Ltd (ASX:PV1) represents a unique investment opportunity as a leveraged play on the growing shift to alternative energy and carbon reduction, particularly in Europe, but applicable on a global basis.
- The keystone to production and growth is the company’s proprietary ‘storage tank’ IP, enabling greater volumes of compressed gases to transport at lower cost (‘more for less’).
- The company holds a material early-mover advantage with a number of strategic partnerships and two hydrogen supply, offtake and shipping agreements expected to become unconditional over the next 12 months.
An Update on Gold: Time for a Pause?
- Gold violated its rising trend line in all major currencies except yen, which may be a technical warning of a tiring bull. Is it time to turn cautious?
- We remain gold bulls. Gold prices are consolidating after strong gains in H1 2025, but the trend is still up.
- Bullish sentiment isn’t stretched and central bank buying provides long-term demand.
JSW Steel: Steady Output Amid Pricing Pressure; Record Volumes Likely Ahead
- Volume: JSW Steel reported 7.26 Mnt of crude steel production in Q1 FY26, up 14% YoY, despite seasonal and maintenance-related disruptions.
- Expansion: The company is on track to scale up its capacity from 35.7 MTPA to 43.4 MTPA by FY28, led by ramp-ups at Vijayanagar, Dolvi, and greenfield Odisha.
- BPSL: Legal clarity on the BPSL acquisition remains pending, though operations have been successfully ramped up to 4.5 MTPA under JSW’s management.
Tata Steel – 1QFY26: Stable Output, Soft Deliveries Amid Planned Maintenance
- Tata Steel’s total crude steel production stood at 7.29 million tons in 1QFY26, flat YoY but down 3% QoQ due to upstream maintenance disruptions in India.
- In Europe, the Netherlands saw steady output, while the UK is progressing with its 3.2 MTPA EAF transition at Port Talbot, slated to begin construction in July 2025.
- With blast furnace relining at Jamshedpur nearing completion and NINL operations normalized, volume recovery is expected from Q2 onward.
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