Central Asia Metals Share Discussion Threads

[yawn1971] 09/9/2022 16:07

Finally some upward movement. Been a long wait ! Roll on divi time !

[santangello] 09/9/2022 15:50

Shrewd buyers in before next Wednesday......

Results will surely be strong and there will perhaps be a hint towards what the company will do with that ever growing cash pile......Special Dividend ???

[zho] 09/9/2022 07:54

Saxo, this morning:

Copper trades higher with the futures market signaling increased tightness, primarily due to a pickup in Chinese demand and imports, which despite lockdowns has seen the infrastructure push ramping up. In addition, a lower-than-expected August CPI and PPI may give the PBoC more room to ease conditions. Exchange monitored inventory levels has dropped to an 8-month low at a time where mining companies struggle to meet their production targets with top producer Chile seeing its exports slump to a 19-month low due to water restrictions and lower ore quality. Speculators have increased short positions in recent weeks as a hedge against recession and China weakness, and they are now increasingly exposed. Support at $3.54 and for a real upside and trend reversal to occur the price needs to break above $3.78/lb.

[zho] 08/9/2022 17:30

Copper spreads are spiking in a signal that physical supplies remain tight despite global economic headwinds.

The premium for cash copper over three-month futures on the London Metal Exchange rose by as much as 91% on Thursday to a high of $145 per ton, an indication the market is paying more for units right now. That’s the biggest backwardation since November last year.

Funds have historically bought and sold copper futures as a proxy for global growth, and the metal has declined 20% this year on fears over a recession. Still, the underlying physical market is robust, with Chinese copper imports ticking higher, while top producer Chile said exports were at a 19-month low. Copper climbed as much as 2.4% on the LME, the most in almost five weeks......

[yawn1971] 08/9/2022 12:59

Someone buying?

[zho] 07/9/2022 15:20

>>Doesn't China have a massive Construction sector>>

It does, yes. I'll post the whole article in case people have trouble accessing it.

It's contained in the Bloomberg Elements daily email, which anyone can sign up to.

+++++++++++

The story of the world’s industrial commodities over the past two decades is a tale of Chinese cement.

At least 40% of demand for every major metal comes from China, and roughly 40% of that sum is used just in real estate. Steel goes into reinforcement bar, railings, roofing, doors and elevators, often coated or alloyed with zinc or nickel; aluminum is used for window frames, copper in wiring and appliances.

All that consumption first requires that concrete gets poured. Look back at the Bloomberg Industrial Metals index since China joined the World Trade Organization in 2001, and the turning points from bull to bear markets track closely with the moments the country’s cement output started to accelerate or decelerate.

That’s reason to fret about where the China Building Materials Federation sees the world heading. On Monday it released its map for the remainder of the 14th Five-Year Plan running through 2025. The most, er, concrete promise is that emissions from the cement sector will peak this year.

It’s almost impossible to decarbonize cement production in any significant way, especially in the short term, so a peak in emissions means a peak in output. That will have knock-on effects throughout the universe of hard commodities.

The industry will actually be lucky to see a peak this year rather than an outright slump. The floor space of newly started homes in July fell to its lowest recorded level since 2009. With “mortgage strikes” spreading among householders, the amount raised in advance payments for homes in March, April and July was at best half of the corresponding figure last year — a momentous drop, given such deposits account for about 37% of total real estate funding. That’s consistent with the picture of the economy painted by today’s lackluster trade data.

Commodity bulls will hope these problems prove a temporary blip, to be fixed with a dose of stimulus as China resumes its inevitable path of construction-heavy growth. The vision of the country’s cement sector — the one it’s now promising the government it will deliver — is far different. Today’s real estate weakness is a sign that a once-in-history construction boom has come to an end. The future promises only stasis, and decline.

[geckotheglorious] 07/9/2022 15:15

Zho,
Doesn't China have a massive Construction sector - specifically housing - crisis incoming?

[zho] 07/9/2022 15:02

China Puts Cement Shoes on Metals: Elements by David Fickling

Peak concrete production this year will have knock-on effects throughout the universe of hard commodities.

[mount teide] 04/9/2022 01:42

Chilean Copper Industry, the worlds largest, has spent $25bn over the last 5 years trying to maintain output at 5.8m tonnes/yr - it failed.

Production has actually fallen by 400k tonnes/yr - a 400ktpa mine would be the world’s fifth largest according to 2021 production tables. Water scarcity, declining grades, depletion rates, skinny project pipelines, industrial action, taxation increases and regulatory uncertainty and ever-expanding capex budgets have extracted a heavy toll on the industry over the last 5 years - with a recent report by BMO Capital Markets suggesting Chile will experience more of the same over the decade ahead.

Copper price: Chile, Codelco face another lost decade of output growth - Mining 2 Sept 2022

'Amid all the economic gloom and doom, a bombshell announcement this week by the world’s number one copper producer appears to have gone largely unnoticed or ignored by large-scale speculators on futures markets who’ve been net short on copper for the last seven weeks.

Chile’s state-owned Codelco last week said it expects output to reach between 1.49 million and 1.51 million tonnes this year, down from a previous forecast of 1.61 million tonnes.

On Wednesday, Codelco chairman Maximo Pacheco told a newspaper 2023 guidance is 1.45m tonnes, but significantly, there is no prospect of an improvement.

“For the five-year period between 2023 and 2027, the best forecast we have is 1.5 million tonnes on average.
“Structural projects [to maintain output levels] are effectively behind schedule and over budget.”

The “best forecast” would constitute the lowest output in at least a decade and compares to average attributable output of 1.74m since 2010 according to data from sister company Miningintelligence.

Codelco’s output next year, would more than 400,000 tonnes below its 2015 peak. A 400ktpa mine would be the world’s fifth largest according to 2021 production tables.

Two lost decades
Codelco’s struggles are Chile’s struggles: water scarcity, declining grades, depletion rates, skinny project pipelines, industrial action, taxation increases and regulatory uncertainty and ever-expanding capex budgets.

In 2021 Chile produced a quarter of the world’s primary copper output of 21m tonnes, according to the US Geological Survey. On a proportional basis that makes Chile’s position in the world of copper on par not with Saudi Arabia’s in crude oil, but the combined output of the 13 members of Opec.

Chilean Copper Output back to 2004 Levels


In a recent report, BMO Capital Markets says Chile is now heading towards two “lost decades” in terms of copper output growth:

“Following the steady ramp-up in the 1990s and early 2000s, output levels have stagnated, with the projections of 6Mtpa-plus of output never coming to pass.

“And this is not for a lack of investment, with a number of large new mines coming to market over this period. Rather, it is a function of decline at existing assets.”
BMO notes that in particular, SX-EW production in Chile “continues to trend inexorably lower” and is now roughly 500,000 tonnes below peak levels seen in 2009.'

[bozzy_s] 02/9/2022 17:03

No buyback please. Increase the dividend above the current 20p/pa - say 22p for starters, with a note that it will grow every year going forwards, all being well. A starting yield of 10% would surely bring in buyers.

That said, GKP is yielding 36% and growing, debt-free, and is overlooked due to some red flags.

I'd much rather be in these high-paying established profitable companies than loss-making newbies.

[spoole5] 02/9/2022 05:16

Dollar strength has to be helping considerably here.

[yawn1971] 01/9/2022 10:31

Hey Rio Tinto .... we are over here !

[cthompso] 01/9/2022 08:12

Interesting read - thanks.

[zho] 31/8/2022 14:44

I've just got around to reading GoRozen's latest quarterly report, published a couple of weeks ago. The section on copper starts at page 30:

S&P Global Admits We Have a Copper Problem

[mondex] 31/8/2022 09:22

The money will be used in M&A activity surely (+increased dividend)

[zangdook] 31/8/2022 02:46

see PHSC for a good buyback (two in fact). A significant buyback in a dividend-paying company can be a great benefit to shareholders because once it's done dividends should grow (not the case with PHSC so far, it just put the share price through the roof).

[lauders] 31/8/2022 00:56

The big dividend option would be better than the buy back one IMHO. Lots of discussion on various company BBs about the benefits of buy backs for the average Jo shareholder and I have never seen a good one. Benefits management more than shareholders from what I have read!

[spoole5] 30/8/2022 21:58

Surely about time for a buyback with that growing cashpile

[yawn1971] 24/8/2022 14:04

Bout time this share did something ..... Big divi would be very nice in sept

[zho] 19/8/2022 08:35

WHY RESOURCES DURING A RECESSION

We strongly discourage investors from using recessionary fears as a reason to sell commodities. Commodity markets today bear no resemblance to 2008. Investors using the 2008 GFC playbook risk selling commodities right at the bottom, missing the huge potential returns embedded in these markets over the coming decade.

[zho] 17/8/2022 10:38

Perhaps badly, but if some production of metals goes offline because of high energy costs, won't that tend to boost prices, other things being equal, as was the case with zinc yesterday?

[gotabsirius] 17/8/2022 10:13

Question is how will our opps/costs be impacted in Macedonia?

[zho] 16/8/2022 13:39

Zinc surged after one of Europe’s largest smelters announced it would halt production next month as the continent’s energy crisis threatens to hobble heavy industries.

The Budel smelter in the Netherlands -- controlled by Trafigura Group’s Nyrstar -- will be placed on care and maintenance from Sept. 1 “until further notice,” according to a company statement. Zinc jumped as much as 7.2% on the London Metal Exchange as traders priced in even tighter supply....

[schmally] 11/8/2022 12:21

Whilst geo/political risks in CAML's Kazakhstan operations look to be under control and not of significant concern at present, I'm certain that when they are debt free next month with an increasing cash mountain, they will look to further de-risk the business with an acquisition in safer territory, whilst maintaining existing operations.

[melton john] 10/8/2022 19:09

They don't need Russia https://news.yahoo.com/kazakhstan-defies-putin-234700423.html