In today’s briefing:
- [Japan Buybacks] ShinEtsu Chem (4063) – How the FCSR Works
- Gold About To Lose Its Shine?
- Global base oils arb outlook: Week of 19 May
- Moresco (5018 Jp) – True Value Is Tested in Times of Adversity
- Global base oils margins outlook: Week of 19 May
- Archean Chemical Industries Q4 & FY25 Update: Strong Volume Growth & Strategic Expansions
- Apcotex Industries Q4 FY25 Update: Strong Volume Growth and Margin Recovery
- [IO Fundamentals 2025/20] US Tariffs Weigh on China’s April Economic Performance
- SUUN: Reports Q3 results
- ADX Energy: Adding Four Low Risk Drill-Ready Shallow Gas Prospects to Start Drilling by YE25
[Japan Buybacks] ShinEtsu Chem (4063) – How the FCSR Works
- Late April, Shin Etsu Chemical (4063 JP) announced a huge ¥500bn 200mm shares (10.2%) buyback. That was never ever going to happen. That needed a ¥2500 share price, not ¥4300+.
- But it was big, and started in late May. Today, they announced how. It is a “Japan ASR”, the Nomura version, this time with an interesting twist.
- In response to a couple of reader questions today, I provide a brief overview of how these things work.
Gold About To Lose Its Shine?
- The latest BofA survey showed that the consensus trade continues to be “long gold” with 58% of participants surveyed, followed by only 22% “long mag 7”.
- According to the analysis, gold is now more overvalued than ever before (since data was recorded in 2008). At the same time, positioning in the US dollar fell to a 19-year low.
- The positioning in gold is even that extreme that it pulled the entire commodity basket up with it – relative to equities.
Global base oils arb outlook: Week of 19 May
- US Group II base oils price-premium to vacuum gasoil trends higher in recent weeks compared with Q1 2025, even with dip in premium in mid-May.
- Group II domestic/export price premium trends higher after holding in relatively narrow range from mid-Nov 2024 to end-Q1 2025.
- Narrow range contrasts with steeper fall in Group II export price-premium to VGO in Q4 2023 and Q1 2024, followed by sharper recovery from end-Q1 2024.
Moresco (5018 Jp) – True Value Is Tested in Times of Adversity
- In FY2025/2, MORESCO Corporation (hereinafter referred to as “MORESCO” or “the Company”) reported net sales of JPY 34,374 mn (+7.8% YoY), driven by increased sales volumes in Japan and overseas, as well as revision to selling prices.
- Operating profit rose by only 13.6% YoY due to higher R&D expenses, while ordinary profit remained flat, weighed down by a decrease in foreign exchange gains and profits from equity-method investments.
- Profit attributable to owners of parent (hereinafter, net profit) fell by 21.1% YoY owing to a deterioration in extraordinary gains and losses.
Global base oils margins outlook: Week of 19 May
- Global base oils prices hold firm vs feedstock/competing fuel prices even as they edge lower.
- Firm base oils values point to tight supply-demand fundamentals, incentivize refiners to maintain high output.
- Base oils values hold firm ahead of typical seasonal slowdown in demand in coming weeks in Asia, and from start of Q3 in Europe/US.
Archean Chemical Industries Q4 & FY25 Update: Strong Volume Growth & Strategic Expansions
- Archean Chemical Industries (ACI IN) posted strong operational performance, driven by robust export growth and stable demand across key segments.
- Despite external market challenges, Archean’s diversified product portfolio and strategic acquisitions provide a solid foundation for future growth.
- Archean is well-positioned to continue expanding, with significant upside in bromine derivatives and energy storage, supporting its long-term growth trajectory.
Apcotex Industries Q4 FY25 Update: Strong Volume Growth and Margin Recovery
- Apcotex Industries (APCO IN) reported a robust 12.5% YoY revenue growth in Q4 FY25, driven by strong volume and export growth.
- Despite external challenges like crude price volatility and global overcapacity in latex, the company showcased strong operational performance.
- The recovery in margins, driven by improved capacity utilization and higher exports, supports optimism for FY26 despite market uncertainties.
[IO Fundamentals 2025/20] US Tariffs Weigh on China’s April Economic Performance
- China’s industrial output grew 6.1% YoY in April 2025, surpassing expectations but slowing from March’s 7.7% surge, as the economy sustained steady growth amid complex domestic and external challenges.
- Retail sales growth slowed to 5.1% in April, missing expectations despite government stimulus. Cautious consumer sentiment persists amid economic challenges, subdued income growth, and concerns over U.S. tariffs.
- Easing U.S.-China tensions are boosting Chinese market confidence, driving up steel production and iron ore demand. With inventories thinning, spot buyers may bid aggressively, lifting prices in the near term.
SUUN: Reports Q3 results
- SolarBank has positioned itself as a vertically integrated energy firm offering solar, battery energy storage systems (BESS), and other forms of power development services, EPC services, Operations & Maintenance services, and operates as an independent power producer (IPP).
- Despite the apparent shift in US Energy policy at the Federal level, demand for renewable energy remains robust at the state, provincial, and local levels.
- Increased energy demand from data centers, renewed domestic manufacturing, and EV penetration should all increase solar demand.
ADX Energy: Adding Four Low Risk Drill-Ready Shallow Gas Prospects to Start Drilling by YE25
- ADX has now matured 13 shallow gas prospects across the ADX-AT-I and ADX-AT-II licence areas in Austria.
- The play is proven, supported by historical discoveries within the basin.
- Nearby historical discoveries in the area have produced 220 bcf to date.
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