Resource Stock Review - June 14

On June 14, the domestic commodity futures market closed generally higher. Basic metals rose across the board, with Shanghai nickel rising by more than 5%; energy chemicals rose by more than 4%; low-sulphur fuel oil rose by more than 4% and glass by more than 3%; most agricultural products rose, palm oil rose by more than 3%; black products all rose, coke rose nearly 3%; and precious metals all fell slightly.

Industrial side: In terms of external mining, as of June 12, total global iron ore shipments were 29.142 million tons, a decrease of 2,044,000 tons over the previous month. The decrease mainly came from Australia. The total volume of arrivals at China's 45 ports was 23.134 million tons, an increase of 3.52 million tons over the previous month. Currently, arrivals to Hong Kong are at a moderate level; since May, shipments from foreign mines have remained at a medium to high level, and it is expected that arrivals will gradually pick up in the future.

As of June 2, 126 domestic companies produced 397,500 tons of iron powder, +0.56 million tons compared to the previous month. Currently, it is still in the seasonal recovery stage, and it is expected that there will still be room for future increases in production.

On the demand side, according to Steel Union data, as of June 9, the average daily iron and water production rebounded slightly from month to month, and was still above 2.4 million tons. The average daily consumption of shugang and steel mills rebounded sequentially, and short-term demand was still strong.

In terms of inventories, the removal of port inventories has accelerated, and steel mill imported ore inventories have reached a new low. Steel mills are mainly in need of stock replenishment.

Shanshen Iron Ore (3047.HK) closed at HK$17.21, up 0.23%

Cumulative return: 1 week: 3.93% January: 12.85% March: -5.28% June: 8.92% Since listing: 131.01%

Regarding this year's cement market, Tapai Group stated in its 2022 annual report that the real estate industry will pick up further in 2023 and is expected to bottom out and stabilize, and the downward effect of real estate on cement demand will be drastically reduced compared to 2022; infrastructure investment maintained rapid growth in 2022. As infrastructure project investment and financing blockages are further cleared, infrastructure in 2023 will become one of the important driving forces supporting the economy, and infrastructure is expected to continue to grow rapidly. Demand for cement is expected to remain flat or decline slightly throughout 2023, and the growth rate of demand is characterized by low to high, weak and strong back to back. In its annual report, Jidong Cement believes that the real estate industry is expected to bottom out and stabilize in 2023. It is expected that the year-on-year decline in new construction and completed area will narrow, but the overall downward trend in real estate will continue; as infrastructure project investment and financing blockages are further cleared, infrastructure investment is expected to continue to grow rapidly in 2023. Demand for cement for the whole of 2023 is expected to be basically the same as in 2022, showing the characteristics of low and high, weak and strong before.

ACG Acquisition Co., a blank check company (SPAC) under Artem Volynets, a veteran of the Russian metal industry and a former executive of Rosalco, agreed to buy two Brazilian mines for $1 billion (including debt) to meet the needs of electric vehicle manufacturers.