The latest Market Talks covering Basic Materials. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0815 ET - Austrian specialty steelmaker Voestalpine sees growth opportunities in sustainable rail mobility. "Rising global investments in the expansion and modernization of rail networks, new transport corridors, and increasing demand for digitalization are opening up attractive prospects for voestalpine Railway Systems and creating significant and sustained demand for its high-quality products," Chief Executive Herbert Eibensteiner says. The company is focused on the Railway Systems segment, whose revenue is expected to increase to approximately 3 billion euros by around 2030 from a current level of roughly 2.2 billion euros. Voestalpine also spots growth potential in India due to extensive investments in new high-speed rail, freight transport, and urban mobility projects. (andrea.figueras@wsj.com)
0636 ET - European mining companies' potential to benefit from the build out in artificial-intelligence capacity is underappreciated, UBS strategists Gerry Fowler and Sutanya Chedda write. Basic materials companies that supply the equipment and metals needed to build AI capacity are showing strong buy signals when analyzing market trends, earnings, valuation and sentiment, the strategists say. Copper and iron ore miner Anglo American is an especially clear example of mining's importance for industrial capacity expansion, they say. The strategists upgrade mining to a favored sector. A basket of European basic resources stocks rises 1.4%. (josephmichael.stonor@wsj.com)
0139 ET - Increases in Chinese and European aluminum output won't be enough to pull the global market out of deficit this year, says Commonwealth Bank of Australia's Vivek Dhar. However, rising supply from India and Indonesia, alongside an anticipated recovery in Middle East supply, is expected to flip the aluminum market into surplus next year, Dhar says. "This should fundamentally weigh on aluminum prices--especially if the U.S. dollar strengthens as we anticipate in the coming quarters," he says in a note. Dhar estimates 55%-60% of the volume lost from Middle East supply disruptions has been offset by Chinese production growth between January and August. Stronger European output has offset another roughly 20% of those supply interruptions, he says. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2315 ET - MA Moelis Australia thinks Luca Mining is getting Capstone Copper's Cozamin mine at an attractive price. The up to US$385 million sale compares to MA's valuation of US$631 million. "However, we are conscious of potential discrepancies between our price assumptions and those used by both CSC and the party acquiring the asset," it says. The price might also suggest either a shorter mine life or higher exit obligations than MA was estimating. "Regardless, the difference between our valuation assumption and the upfront sale price is arguably modest" versus Capstone's over A$11 billion market value, it says. The deal also offers some potential benefits for Capstone, including reducing operating risk, says MA. It has a buy rating and A$16.40 target on Capstone. Shares are up 1.4% at A$14.76. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2301 ET - At first glance, Bellevue Gold's FY result looks better than expected, says MA Moelis Australia. It cites the treatment of operating leases between the quarterly update and annual fiscal result as the reason. "BGL include various lease expenses in operating costs as per AISC [all-in sustaining cost] reporting guidelines, which are subsequently treated as a finance expense in the formal accounts," says MA. "We clearly need to find a way to better reflect this in our estimates." Bellevue's result is otherwise "fairly clean" and it remains well placed to close its hedge book soon. That would give a big boost to both earnings and cash flow, which could drive a continued re-rating, MA says. It has a buy rating and 1.95 Australian dollar target on the stock. Shares are up 5.5% at A$1.635. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2125 ET - Ramelius Resources' better-than-expected medium-term production outlook offsets higher costs and near-term cash flow constraints, according to Macquarie. The gold miner's FY 2029-2030 production forecasts are up to 12% higher than consensus. Macquarie keeps a neutral rating and 4.00 Australian dollar target on the stock. It says it thinks Ramelius's shares are fairly valued, trading at roughly 9.0x FY 2027 enterprise value/Ebitda estimates. Macquarie cautions that higher capital expenditure will limit near-term cash flow generation. Shares are up 3.4% at A$3.93, adding to Monday's 6.2% gain. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2115 ET - Weather-related palm oil and mining disruptions, coupled with higher oil prices, could slow Indonesia's external balance recovery, CIMB economists Joel Cheung and Michelle Chia say in a note. Palm oil output could remain under pressure from dry weather and wildfires, while low water levels could disrupt coal transportation and nickel production in near term, they reckon. Higher oil prices are also expected to widen the deficit by raising import costs, they say. They expect the current account deficit to narrow from its 2Q peak of 3.3% of GDP, but see weather disruptions and oil prices as key risks. They raise their 2026 current account deficit forecast to 2.0% of GDP, up from 1.6% expected earlier. (yingxian.wong@wsj.com)
2108 ET - Resolute Mining loses a bull in Macquarie after downgrading 2026 production and cost guidance, citing ongoing disruptions in Mali. The gold miner said a challenging operating environment continues to impact underground mining, open-pit mining and sulfide processing at its Syama mine. "Near-term sentiment will be dominated by performance at Syama, which is outside management control," says Macquarie. The bank downgrades Resolute to neutral from outperform. It cuts its share-price target to 1.35 Australian dollars from A$1.45. "Over time, we see upside with the development of Doropo," Macquarie says. The stock is down 1.4% at A$1.2225, adding to Monday's 8.5% loss. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
1412 ET - Gold futures settle lower, snapping a three-session winning streak. "Several conflicting fundamental factors are shaping the market between support and pressure," Rania Gule of XS.com says in a note. Higher interest rates and U.S. yields have become a direct headwind for gold, but "I do not believe that higher interest rates necessarily mark the beginning of a prolonged bearish trend," she says.A decisive break above $4,400 would show buyers able to absorb the impact of a stronger dollar and higher yields, while failure to break through that level keeps open the possibility of gold testing previous support zones, Gule adds. Front-month gold settles down 0.9% in New York at $4,345.80 a troy ounce. Silver falls 1.1% to $65.825 a troy ounce.
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