12:00 16/09/2017 Re: Glencore revival rumours?
Games, "1.3% of my wad in RIO and a mere 0.61% in GLEN" RIO is 10.1% of mine. LKH on the flybridge
11:58 16/09/2017 Re: Glencore revival rumours?
Games, "you could do a Shell------> BG type move switch all your RIO into GLEN." Nah. I don't trust GLEN and I like RIO as it is. I don't feel that RIO wants to merge with GLEN, so the initiative is with GLEN to propose some deal structure that works for both sides to overcome RIO's reluctance. Perhaps a nil premium merger using new equity? Combined with a priori nice clear agreement about synergies, staff cuts, post merger disposals. It could work, though I feel that the cuture of the two organisations is very different, which might make it hard for them to produce a nice integrated company. GLEN is more entrepreneurial, with a trader's mindset, whereas RIO is a nice safe pair of hands run by sensible pragmatic miners. Not sure how the Ockers would feel about the "Australianness" of RIO being watered down by a tie-up with GLEN, which has no national ties (Switzerland doesn't count). LKH on the flybridge happy to listen to any proposal and vote accordingly
8:37 16/09/2017 Re: Glencore revival rumours?
"I imagine that Glasenberg would want to be the big banana which wouldn't sit well with the RIO lads I suspect." LK -- If that were correct and Glencore were the acquirer so to speak, and given the size of RIO would that mean Glencore reverting a new dangerous debt position - especially after they recently sold off the family silver to reduce it in the last 2 years? If you thought it would be the other way around, you could do a Shell------> BG type move switch all your RIO into GLEN. Games - 1.3% of my wad in RIO and a mere 0.61% in GLEN
13:17 15/09/2017 NEW ARTICLE: FTSE 100 support collapses
"After four months trading sideways, North Korea and a sterling rally have conspired to dump the @GB:UKX:FTSE 100 below 7,200 for the first time since April.Since Tuesday, the blue-chip index has lost more than 230 points, or 3%, initially the ..." http://www.iii.co.uk/articles/444207/ftse-100-support-collapses
10:35 13/09/2017 Glencore revival rumours?
The FT reports revival of talk about a RIO/GLEN merger, which started with a (quickly rejected) GLEN initiative last year. It makes a fair bit of sense to me. Little overlap apart from copper. It would enable GLEN's trading skills to be applied to RIO's big volumes .... assuming that that would add value LOL. Interestingly the FT says that Chinalco, a big RIO shareholder, would welcome the increased clout that a combo would have. Not sure how good a cultural fit it would be, mind, as I imagine that Glasenberg would want to be the big banana which wouldn't sit well with the RIO lads I suspect. LKH on the flybridge
10:22 04/09/2017 Re: Liberum
Games, I have no idea what is going to happen to metals/minerals prices over the short, medium, or long term but, given that some 80% of RIO's business is iron ore and they have the biggest and best reserves of the stuff in the world (in Oz), which is within a stone's throw of China which, with luck, will want to import it in increasing quantities for years to come, I am happy to entrust part of my shrunken wad to RIO, given that its prospective yield is as near as damnit 5% which is enough for me. In addition its growing exposure to copper and its strong position in aluminium, diamonds, salt, borax, uranium, coal and various abstruse minerals provide further reassurance that, while it may not shoot the lights out, it remains a vital contributor to world prosperity. That's worthy of support. LKH on the flybridge
9:44 04/09/2017 Re: Liberum
Liberum are the pits when it comes to miners. As I have said here before. I personally wouldn't take any notice of them in this sector. They may be good elsewhere, but what we see of their mining analysis as none clients is basically what we already saw 6 weeks ago, as a rule, ie. expect a hold reiteration and price target on GLEN of about 280p any time soon.
8:44 04/09/2017 Liberum
Well an entertaining read if nothing else :- http://www.iii.co.uk/articles/440044/stocks-buy-and-sell-summer-ends """Anglo American (AAL) replaces Rio Tinto (RIO) as the top mining sell. "Cheap valuations show the market doesn't believe current commodity prices are sustainable, we believe that they will go even lower," writes analyst Ben Davis. "We maintain our bearish commodity outlook into 2018 as demand in China decelerates with ongoing credit tightening and slowing fixed asset investment, causing spot [free cashflow] yield to fall to 2%.""" I wouldn't disagree with them on selling Anglo, but are they even close in their assessment that RIO should be on a sell list right now? Strangely enough RIO is becoming less cheap by the day it seems, as is Glencore. I think Liberum has failed to see the rising price of commodities, the debt reduction at these companies and the fact the share prices are no longer that cheap. -- He must have dusted that paragraph off from two years ago and cut and pasted it -- a bit like a solicitor doing conveyancing - I think !! Games -- Analysts -- pppp --- tttttt !!!!!
5:47 04/09/2017 And Now Nickel!
(Copied from GLEN board) "Nickel surged to the highest level in more than two years, and copper chalked up its best mark since 2014, as bets on tighter markets, especially in top consumer China, keep metals buoyant after their longest run of weekly gains in a decade. Nickel advanced as much as 2.9 percent to $12,380 a metric ton, its highest since June 2015. Copper climbed as much as 1.2 percent to $6,915 a ton. All metals rose after the LME Index of six contracts capped an eight-week advance last Friday -- one short of a record run in 2006. ?It certainly feels like there is a broad resetting of expectations that are driving the metals at the moment,? Daniel Hynes, senior commodities strategist at Australia & New Zealand Banking Group Ltd., said. ?I was in China last week and I got the very strong impression that the environmental push is having a pretty profound impact, and that?s not something that?s going to fall away quickly.? Industrial metals are rising amid speculation that sustained demand growth, coupled with restrained supply, will tighten markets. In China, environmental inspections and planned anti-pollution curbs on steel and aluminium have stoked expectations of shortages. Gains are also fuelled by a weaker dollar, a stronger Chinese currency, and a super-charged steel market in China that?s steering sentiment for other commodities. Hot-rolled coil, a major steel product, reached a fresh record on the Shanghai Futures Exchange, rising as much as 3.5 percent. The steel rally has a ?blow-on? effect on the whole metals sector, Hynes said. ?To an extent they are related by demand, so it?s not surprising they get pulled along.? Miners are gaining from the metals surge, with the Bloomberg World Mining Index of shares rising for an 11th day to the highest since 2014.
18:47 02/09/2017 Coal & Iron
RIO says it completed the sale of Coal & Allied in Australia to China's Yancoal for A$3.5B (US$2.69Bn), and adjusts its guidance for 2017 thermal coal production. With all Hunter Valley coal operations transferring to Yancoal, RIO revised guidance for 2017 thermal coal production to 13M-14M tonnes (17M-18M tonnes previously). Speculation about what RIO will do with the sale proceeds is inevitable. Debt repayment plus some more money for shareholders are the two most likely uses for the money, several commentators think. Special div or buyback, I wonder? Perhaps more importantly, RIO has now opened the Silvergrass iron ore mine in W. Australia, which will add another 10M tonnes to annual production capacity.
16:09 02/09/2017 Re: Results
LKH, "I meant a metaphorical "trading" package rather than literally shovelling in the coal down the hatch on top of the iron ore!" I managed to edit out a bit that showed I understood what you meant. Yes, there may be room for an overall package, with the advantage that the customer only has one supplier to deal with which might make a premium price viable. Especially if it could be put in place for a number of years ahead. The problem there is that you're going to end up fixing a price, and that can go badly wrong, as Glencore found out last year with coal. I've often wondered why the Chinese don't do their smelting within Australia. Seems daft digging up the ore and the coal there and then shipping it to China. Their companies are certainly not above shipping out thousands of workers to mining camps in the middle of nowhere as they have done in African countries, and it would help their apparent ferocious drive towards cutting pollution within China. There may be objections from the Shanghai metal markets being cut out of the loop too. Or other interests at work. Presumably its easier to get a deal in Africa for such projects, whereas Australia is geared up to supply the workforce and wherewithal to build any required infrastructure - and to exact the appropriate taxes/royalties. I'm sure we'd see deals being done if both sides felt there were synergies to be had.
8:32 02/09/2017 Re: Results
Eadwig, I meant a metaphorical "trading" package rather than literally shovelling in the coal down the hatch on top of the iron ore! It may well be that coking coal is such a widely available commodity that there's no particular advantage for the Chinese in buying it and iron ore from the same supplier. Equally it may be that having a knowledge of the properties of both coking coal and of iron ore gives RIO the ability to tailor the supply and quality of both minerals in a way that gives them some advantage vis a vis other companies which only supply the one or the other but not both. LKH on the flybridge
22:25 01/09/2017 Re: Results
LKH, I can't immediately think of any synergies. I doubt they'd be transported together, except maybe as part of the same train within China. If they shift coal by train in China. I've seen plenty of it on the rivers, but apart from one overnight sleeper, when I was sick anyway, I've never been on the Chinese railways to take note. There's a reason you don't mix iron ore with other stuff on bulk carriers too, but I can't drag it from the back of my brain at the moment. You'll probably know more about that than me anyway. (and travelling on Chinese rivers, come to that!)
18:00 31/08/2017 Re: Results
Eadwig, "I'd personally rather they got rid of coal completely" I'd like them to get out of thermal coal completely but to keep the coking coal. There must be synergies with the iron ore boys if RIO can flog the Chinees an a package of iron ore and coal to turn the former into steel, no? LKH on the flybridge thinkin' outta the box
17:30 31/08/2017 Re: Results
Games, "Offloading the coal assets seems like a reasonable long term decision, unlike Glencore's trading ethos to buy more in the short to medium term." Those coal assets are right next door to GLEN's existing assets, so they will gain economies of scale one assumes. GLEN have immediately started to look for a buyer for another, more isolated, Australian coal asset, so you can see the thinking. I'd personally rather they got rid of coal completely, but if you have to have it, you may as well get your cost base down and profitability up (before flogging the whole operation to the Chinese or Indians, most probably).