In today’s briefing:
- Timing the Announcement of POSCO Future M’s Rights Issue
- A/H Premium Tracker (To 11 Apr 2025): Sharp AH Premia Widening
- Weekly Update (AMS, LION, Tariffs)
- Copper Tracker 14th April 2025: Green Shoots Emerging After the Trump Tariff Fiasco
- Iron Ore Tracker (14-Apr-2025): Iron Within The Band, Set To Bounce On China Stimulus Talks
Timing the Announcement of POSCO Future M’s Rights Issue
- All three local CRAs are pushing hard — an equity raise isn’t optional, it’s the only shot at keeping the AA- rating intact. Street says it’s not if, it’s when.
- Late April to mid-May looks like the key window. And start keeping tabs on the flow real tight.
- Leak channels are still active. FSC’s pointed at IB sales and law firm staff. If we see outsized sell prints—especially from local hedge funds, that’s our cue to act.
A/H Premium Tracker (To 11 Apr 2025): Sharp AH Premia Widening
- AH Premia bounce higher. Spread curve torsion is mild given how much AH is widening again. Two weeks in a row we see a big net move.
- For a month I thought warning signs were flashing and spreads could widen. They are still widening despite really big net SOUTHBOUND buying.
- I expected the right thing to do was hunker down and be flat H/A risk. Hs underperformed As by 3.7% over two weeks so it’s tough to be flat enough.
Weekly Update (AMS, LION, Tariffs)
This week the only thing that mattered was tariffs.
In my recommendation update section, I will provide some commentary on which recommendations are most impacted by tariffs.
On April 9, 2025, President Donald Trump announced a 90-day suspension of increased tariffs on most imported goods, maintaining a base tariff of 10% during this period.
Copper Tracker 14th April 2025: Green Shoots Emerging After the Trump Tariff Fiasco
- The introduction of Trump Tariffs has adversely impacted the commodities market’s promising start to the year, except for gold, which has exceeded 3,200 USD/oz.
- Following a peak of 10,000 USD/ton on March 25, copper prices fell 14% to 8,600 USD/ton before rebounding in the past two trading sessions to 9,150 USD/ton.
- The dollar’s depreciation, Trump’s flexibility on tariffs, and anticipated acceleration in Chinese stimulus have created a more favorable market environment for copper.
Iron Ore Tracker (14-Apr-2025): Iron Within The Band, Set To Bounce On China Stimulus Talks
- Iron ore prices dropped by 5.5% last week, as the tariff war spooked the market and global recession fears gripped the market.
- With the temporary relaxation of the tariffs and a meeting of key Chinese leaders to front-load the stimulus, the market seems slightly less pessimistic about iron ore prices.
- With iron ore prices falling below USD 100 per ton, the higher end of the cost curve, we anticipate a slight rebound toward the USD 105-110 per ton range.
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