Daily Brief Energy/Materials: United States Steel, Linde India Ltd, Devon Energy, Gold, Marathon Petroleum, Base Oil, JSW Steel Ltd, MPLX LP, Natural Gas, Reliance Industries and more

• Trump’s endorsement removes the political overhang, reigniting momentum for Nippon Steel’s $55/share all-cash offer.
• Implied EV/EBITDA of 8.94x reflects ~$2–3B in strategic synergies over standalone valuation.
• 11.59% annualized return offers attractive arbitrage upside with manageable regulatory and execution risk.

• Linde India plans to double gas capacity to 20,000 TPD by FY27 with ₹32 bn capex, including new ASUs for Tata Steel.
•  FY25 PAT rose 5% despite a 10% revenue dip, driven by margin gains and cost efficiency.
• Trades at over 80× P/E FY27, appears justified by annuity-like cash flows from critical long-term contracts with top steelmakers.

• In the first quarter of 2025, Devon Energy demonstrated a balanced performance through a combination of operational discipline and capital efficiency.
• The quarter saw the company showcasing its ability to adapt and thrive despite fluctuating commodity price environments.
• Devon Energy’s results were characterized by a focus on maintaining a strong balance sheet, optimizing operational efficiency, and committing to shareholder returns even in adverse market conditions.

• Investments in commodities and gold as a percentage share of family offices money remain very little, as this year’s Global Family Office Report by UBS shows.
• When asked how they are defying the volatile environment, respondents most frequently cite the selection of managers and/or active management (40%), followed by hedge funds (31%).
• Almost as many family offices are increasing their holdings of illiquid assets (27%) and more than a quarter (26%) are focusing on high-quality bonds with short maturities. 

• The recent results and investment outlook for Marathon Petroleum Corporation (MPC) reflect both strategic advancements and operational challenges faced during the quarter.
• In the first quarter of 2025, MPC reported a net loss of $0.24 per share, primarily due to decreased results in their Refining and Marketing, as well as renewable diesel segments.
• However, despite posting a net loss, the company achieved a commendable 104% capture rate amidst significant turnaround activities, indicative of strong operational execution under volatile market conditions.

• Asia’s base oils demand likely to weaken in face of seasonal slowdown in consumption and rise in supply.
• Drop in lube demand likely to gather pace from start of Q3 2025.
• Drop in demand could be larger than usual because of weaker-than-expected economic growth.

• JSW Steel’s Q4/24-25 results were poor, with lower revenues and earnings due to a weak pricing environment and despite a record production year from capacity expansion.
• The balance sheet deteriorated significantly, although liquidity improved materially.
• We expect FY 2025-26 to be better, with a significant increase in earnings due to an improved pricing environment as well as the new safeguard duty in India.

• MPLX LP reported its financial results for the first quarter of 2025, demonstrating several key developments in its operations and strategic initiatives.
• The company achieved an adjusted EBITDA of $1.8 billion, marking a 7% year-over-year increase, and generated a distributable cash flow of $1.5 billion.
• MPLX returned approximately $1 billion to its unitholders through dividends and conducted $100 million in unit repurchases, reinforcing its commitment to returning capital.

• For the week ending 23/May, U.S. natural gas prices remained flat despite having a volatile week. Hot summer forecasts were offset by a strong storage build.
• For the week ending 23/May, the EIA reported that U.S. natural gas inventories rose by 120 Bcf, moderately higher than analyst expectations of a 118 Bcf build.
• Henry Hub OI PCR fell to 0.89 on 23/May compared to 0.92 on 16/May. Call OI increased by 4.4% WoW, while put OI grew by 1.5%.

Founded in 1973, Reliance Industries (RIL) is one of the largest conglomerates in Asia and India’s largest private-sector corporation. It has diverse businesses including energy, petrochemicals, natural gas, retail, telecommunications, mass media and textiles. RIL is India’s largest exporter, accounting for 8% of total merchandise exports and 5% of the government’s revenue from customs and excise duty. It is listed on the Indian Stock Exchange, with a market cap of c. USD 200 bn. The company is owned (49.5%) and controlled by Mukesh Ambani.