Good afternoon
German Industrial Produktion in January very strong MoM, but just unchanged YoY...forecasters confident of manufacturing looking good.
May looses again in the House of Lords...we punish the POM´s 10:2 in two matches against Arsenal ( ok, with a bit of luck as well! )
Metals are little changed today, while the strike at Escondida drags on, with no end in sight. More details are emerging from Indonesia re the ore export ban. It looks like under specific circumstances, the same amount of ore may be exported ( only sub 1.7% nickel content ), which is smelted locally...From what I have been reading, approx nickel ore for the production of 88.000t of nickel in pig iron might be exported. negative for nickel, but not terrible...
Chinese steel exports are very low in Feb, pointing to very strong, local consumption.
Lucapa Diamonds - receives anoth 7.3 mill$ pay out from the JV, which operates the Lulo Diamond Mine. Important for them, as tehy can make ( hopefully ) good use of it by developing their new asset in lesotho, which would be their second mine and which would derisk the company somewhat from a single mine, singlecountry alluvial producer.
Prairie Mining - excellent announcement today, which seemingly did not interest anyone: Results of their marketing study, which was done as part of the scoping study to be announced shortly, have been very positive. The cost of shippinmg a t of Debiensko hard coking coal to customers in Central Europe will be only about 5$/t, while costs from Australia and the US, the two major suppliers so far, are 38US$ and 33 US$ resp. Historically, the cost advantage for European coal has been split 50.50 between miner and consumer. Early indications make PDZ believe, that they could do better than that, giving them a roughly 15$ net advantage. The rail system could do with an additional 4 mt of coal p.a., which would be sufficient. And finally, Europe currently imports at least 20 millt p.a. from Australia alone. This material needs about 60 days to reach the steel works in Europe, while the Debiensko coal could be at the customers door within 24 hours, with obvious benefits for the consumer. In my opinion, a very positive bit of newas, which should be able to be honoured by the market a little more, once the scoping study will be out in a week or two!
Panoramic - Macquarie today initiated coverage on an interesting stock, Clean Teq, which is listed in Australia, and has Robert Friedland as it´s largest shareholder. This research shows us, why PAN are holding at todays level, even though the nickel price if anything, is under a bit of pressure: Macquarie have a price target of 1.50$ for this 1$ stock, capped at 500 Mill A$ today. The plan is to produce 18.000t of nickel and 3.000t of cobalt sulfate in 5 years time, following cap ex of about 1,2 bill A$, giving the stock an EV of about 1.7 bill A$. PAN could produce 11.000t of Ni and 650t of cobalt within a few month, after capex of about 30 mill$, with a market cap of 158 Mill A$ as at today , giving it an "enterprise value" ( market cap - cash + capex ) of about 175 mill A$. I think it´s pretty obvious, which stock I prefer!
Have a nice evening
WS
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