麦格理美股基础材料行业北美股阻力导航

1、10 July 2019United StatesPlease refer to page 62 for important disclosures and analyst certification, or on our website.EQUITIESNorth American Base MEquitiesNavigating the headwinds Base mprices to be under pressure on weakening demand outlook; coking coal prices are expected to fall modestly on com

2、pressed steel margins. A diversified mining portfolio and strong cash generation could help companies navigate the headwinds. We also believe investors should avoid miners with aggressive spending plans.Base mheadwinds aheadPrices for base ms have proved to be the most sensitive in our coverage to t

3、he continuous on/off of US-China tradks and, whats more important, the impaired demand sentiment as an actual deal/certainty is what investors seek. We believe the slowing investment rate may already be dragging global aggregate demand growth and the widely expected China stimulus is likely to benef

4、it more towards ferrous demand versus base. As for equities, we expect a bumpy road ahead and it requires disciplined spending, good cost control and well managed balance sheet to navigate.Coking coal: The likely causalityOur commodities strategy team is looking for a $10-20/t decline from current l

5、evels, driven primarily by compressed steel margins and weaknesses from the thermal side when falling margins could push mills to adjust in favour of lower-tier coal. With that being said, we dont forecast a drop too much below $170/t because a fair bit of US supply is still required to balance the

6、market this year, hence to help prevent Tecks margins and cash generation from falling off the cliff.Balance sheet management: lesson learnedWe are seeing improved balance sheet conditions within our base mcoverage after the past cycles as miners are now more disciplined in chasing acquisitions and

7、expansions. In anticipation of a volatile pricing environment, companies continue to confront commodity price weakness by cutting costs, selling noncore assets, seeking covenant relief, and extending debt repayment schedules. Overall, we now view the North American base mminers as fairly valued rela

8、tive to historical multiples and where we are in terms of commodity prices (met coal and copper).Initiating coverage of North American base mminersWe expect copper prices to stay well below incentive levels, which is positive for the equities in the longer term. However, on a 1 year investment horiz

9、on the picture is less bullish as our commodities strategy team is looking for a demand step down in the second half and early 2020 before estimated LT supply deficit kicks in after 2021. We believe investors should avoid miners with high capital spending pressure; while we expect diversified mining

10、 portfolios and strong cash generation could help companies navigate the headwinds. We initiate coverage on NA base mminers with a Neutral on Teck Resources (TECK/B, TP CAD$30), a Neutral on Lundin Mining (LUN, TP CAD$7) and an Underperform rating on Southern Copper (SCCO, TP USD$35).EV/EBITDA 2GY9.

11、0Southern8.0Copper7.0FCXRIO6.0BHPAntofagasta5.0FirstTeckQuantum4.0LUN3.02.030%35%40%45%50%55%62020 consensus EBITDA margin (SCCO, TCK/B, LUN, FCX on Macquarie est.)Source: Factset consensus, Macquarie Capital (USA), July 2019InsideNavigating the headwinds2Copper4Zinc7Mlurgical Coal10Teck Resources13

12、Lundin Mining31Southern Copper45AnalystsMacquarie Capital (USA) Inc.David Lipschitzdavid.lipschitzXiao Feng, CFAxiao.fengKey points获取报告1、2、3、每周群内7+报告；当日华尔街日报、4、行研报告均为公开利归原作者所有，起点财经仅分发做内部学习。扫一扫关注 回复：加入“起点财经”群。Macquarie ResearchNorth American Base MEquitiesNavigating the headwindsBase mheadwinds ahead

13、Prices for base m US-China trads have proved to be the most sensitive in our coverage to the continuous on/off of ks and, whats more important, the impaired demand sentiment as an actualdeal/certainty is what investors seek. We believe the slowing investment rate may already be dragging global aggre

14、gate demand growth and the widely expected China stimulus is likely to benefit more towards ferrous demand versus base. As for equities, we expect a bumpy road ahead and it requires disciplined spending, good cost control and well managed balance sheet to navigate.Coking coal: The likely causalityOu

15、r commodities strategy team is looking for a $10-20/t decline from current levels, primarily driven by compressed steel margins and weaknesses from the thermal side when falling margins could push mills to adjust in favour of lower tier coal. With that being said, we dont forecast a drop too much be

16、low$170/t because a fair bit of US supply is still required to balance the market this year, hence to help prevent Tecks margins and cash generation from falling off the cliff.Balance sheet management: lesson learnedWe are seeing improved balance sheet conditions within our base mcoverage after the

17、past cyclesas miners are now more disciplined in chasing acquisitions and expansions. In anticipation of a volatile pricing environment, companies continue to confront commodity price weakness by cutting costs, selling noncore assets, seeking covenant relief, and extending debt repayment schedules.

18、Overall, wenow view the North American base mminers as fairly valued relative to historical multiples andwhere we are in terms of commodity prices (met coal and copper).Initiating coverage of North American base mminersW We expect copper prices to stay well below incentive levels, which is positive

19、for the equities in the longer term. However, on a 1 year investment horizon the picture is less bullish as our commodities strategy team is looking for a demand step down in the second half and early 2020 before estimated LT supply deficit kicks in after 2021. We believe investors should avoid mine

20、rs with high capital spending pressure; while we expect diversified mining portfolios and strong cash generation could helpcompanies navigate the headwinds. We initiate coverage on NA base mminers with a Neutral onTeck Resources (TECK/B, TP CAD$30), a Neutral on Lundin Mining (LUN, TP CAD$7) and an

21、Underperform rating on Southern Copper (SCCO, TP USD$35).Fig 1 Net debt/EBITDA ratio versus copper pricesFig 2EBITDA margin versus valuationsEV/EBITDA6.0x$4.50$4.00$3.50$3.00$2.50$2.00$1.50$1.00$0.50$-2GY9.05.0xSouthernCopper8.04.0x3.0x7.0FCXRIO2.0x1.0x0.0xBHP6.0Antofagasta5.0FirstTeckQuantum4.0-1.0

22、xLUN-2.0x3.02.030%35%40%45%50%55%60%LME copper average price ($/lb) LundinSouthern CopperSource: Macquarie Capital (USA), July 2019FCXTeck2020 consensus EBITDA margin (SCCO, TCK/B, LUN, FCX on Macquarie est.)Source: Factset consensus, Macquarie Capital (USA), July 201910 July 20192Macquarie Research

23、North American Base MEquitiesFig 3Macquaries ms & bulk commodity price forecastsLT price 2018$realMar-19est.Jun-19est.Sep-19est.Dec-19est.Mar-20est.2018act.2019est.2020est.2021est.2022est.2023est.2024est.Commodityunitcopper aluminium zincel lead tin$/tonne$/tonne$/tonne$/tonne$/tonne$/tonne6,4001,90

24、02,20017,0001,90018,5006,2191,8592,70412,3892,03721,0606,1211,7932,76612,2661,88519,8015,7001,8202,35012,0001,80018,5005,5001,8002,05011,0001,70018,0005,5001,8002,00012,0001,80020,0006,5272,1112,92513,1332,24520,1645,8851,8182,46711,9141,85519,3405,6001,8032,06313,2501,72522,3755,9751,8032,11315,500

25、1,80023,3756,8501,9752,15017,3751,85023,5007,4002,1702,30018,7501,93824,0007,6502,2702,40019,5002,00024,500gold silver platinum palladium rhodium$/oz$/oz$/oz$/oz$/oz1,25018.01,2008001,3001,30415.488211,4342,7441,30814.888441,3873,0141,35014.608301,5002,9501,40014.808501,4502,9001,42515.208501,4502,7

26、501,26915.718831,0182,2181,34014.948361,4432,9021,43115.808631,3752,6751,36317.389441,1882,3251,36318.501,0381,0751,9131,42519.631,1389881,6431,48021.001,2759601,580iron ore, spot fines iron ore, spot lump hard coking coal LV-PCIsemi-soft coking coal manganese ore steel (avg HRC) steel scrap$/tonne,

27、$/tonne, US$/t. US$/t. US$/t.6375.61351009083105207126117100121204125951251008869102121193121998197170123109708515611310268821631099771841631221117589150110100175116931851169318011997208136124$/mtu,$/tonne$/tonne4.904672356.555882906.235903035.505933105.005783205.506083207.256703225.825873065.505893

28、235.605332935.705532865.805332965.85543310thermal coal, spot thermal coal, JFY uraniumUS$/t. US$/t. US$/lb t586032931102876952575952580952570952610710425819926708027667332667236666937687038alumina ferrochrome molybdenum cobalt lithiumUS$/t. c/lb, EU$/lb$/lb US$/t30013511.0030.09,50038711211.8018.712

29、,50036312012.2014.011,00034010412.5015.09,00033011012.5016.07,00033011512.2516.07,50047413111.9336.814,68835511212.2515.99,87533812612.2517.98,06333013412.5021.38,93834614012.7526.89,37535514412.7533.010,37535815613.0336.011,200Source: Macquarie Commodities Strategy, Bloomberg, LME, TSI (i.e. 2018$

30、real, active from 2024), July 2019Fig 4 Next 12-months: Nis still No.1; precious up there tooFig 5 Five years out: Seek EV inputs; avoid bulksSource: Macquarie Commodities Strategy, July 2019Source: Macquarie Commodities Strategy, July 201910 July 20193elgold platinumsilver aluminium steel scrap ura

31、niumtin alumina copper leadsteel (HRC)cobaltplatinum elsilver lithium60%40%20%0%-20%-40%-60%40%Mar-2020%0%-20%-40%-60%Macquarie ResearchNorth American Base MEquitiesCopperCommodities Compendium Demand, impairedNot exactly 2015, butCopper was almost looking bullish for a moment there. On the presumpt

32、ion of a US:China trade deal, demand data prints still reasonable and supply starting to look messy, we thought there might be acase for a rally. Since then however the trad resumption of talks announcement, theks have taken a wrong turn, even allowing for the G20 PMIs have recorded contraction in 3

33、 of the past 4months, the US data beginning to turn, and as we observed recently, history tells us that moderate supply problems only matter in a neutral-to-bullish demand environment.Pushing through the GDP adjustments from our economists into our ex-China demand figures, andincorporating the chang

34、es to our centraldemand mfrom the slowing seen means that ourcopper supply-demand balances soften by 200-400ktpa (as the demand impact in 2019 grows as it rolls forward). Although this means that nearby we are still technically in deficits, these have moved to a size (200kt) that more accurately des

35、cribe a neutral balance. (Further out we move to meaningful deficits on project pushback, discussed later.) This softening is loaded into H2, meaning we expect to see worsening signals and enough selling to take copper back down into the low $5,000s/t. To answer the question, how do neutral/slightly

36、 undersupplied balances effect that price move, we point to coppers greater tendency than peers to be traded as a China instrument (fig. 1) and the impact ofweakPMIs on prices historically (fig. 2). Our China economist Larry Hu maintains that thePMIs are not yet bad enough to spark level 3 stimulus,

37、 which would go some way to offsetting the downward pressure. Instead he calls for this at the October plenary.Fig 6 Copper is currently predominantly trading on a high- level China viewFig 7 Andgrowth is slowing sharply into H2 on tradeheadwinds and structural weaknessLME copper 3M ($/t, RHS) vs Ha

38、ng SengLME Copper 3M ($/t, LHS) vs Caixin PMI (RHS)3600034000320003000028000260002400022000200001800016000110005655545352515049484746equity index (LHS)7500700010000900065006000800070005500600050005000450040004000Jan-14Jan-15Jan-16HSIJan-17Jan-18Jan-19Jan-10Jul-11Jan-13Jul-14Jan-16Jul-17Jan-19LME CuL

39、ME Copper 3MPMISource: LME, HKSE, Macquarie Commodities Strategy, July 2019Source: LME, Caixin, Macquarie Commodities Strategy, July 201910 July 20194Macquarie ResearchNorth American Base MEquitiesFig 8 Global copper market balance (000 tonnes copper contained)000t copperMine production% Change YoY2

40、01620,0305.4%201719,982-0.2%201820,7824.0%2019F20,478-1.5%2020F21,0833.0%2021F21,1720.4%2022F21,5451.8%2023F21,502-0.2%2024F21,5770.3%Concs balance164265316-308-69-56-100-201-172Refined production% Change YoY22,3811.4%22,6891.4%23,3272.8%23,7842.0%24,2952.1%24,5871.2%25,1872.4%25,4671.1%25,7521.1%Co

41、nsumption% Change YoY22,3862.8%22,7071.4%23,3953.0%23,8622.0%24,3021.8%24,7852.0%25,2742.0%25,6951.7%26,2152.0%Refined balance SRB/bonded stocking Adjusted balance-4150-154-18-69-77-7-198-87-229-463-18-69-77-7-198-87-229-463LME Cash ($/t)486361626527588556005975685074007650Source: LME, Comex, SHFE,

42、ICSG, Wood Mackenzie, company reports, Macquarie Commodities Strategy, July 2019As a case in point, the very end of June brought a breakthrough in the US:China trade stand-off with the G20 agreement to restart talks, but also another sub-50 Caixin PMI print and the weakest US ISMreading for 2.5 year

43、s. These latter two overwhelmed the trade story, leaving base ms includingcopper down the next trading day. We essentially see copper moving lower on deteriorating data untilthe level 3 stimulus arrests the decline, noting that copper (unlike the other base ms which are allsome way into their cost c

44、urves already) is well above the 9th decile currently (fig. 9), which is $5,200/t (235c/lb), meaning a natural support is not seen until the low $5,000s/t. After a stimulus announcement we expect stability (preventing a 2015-style me own when Chinas authorities waited too long) but not much recovery

45、, since its composition is likely to be more friendly towards ferrousm ms demand versus base (i.e. property and infrastructure over consumer), and so we thinks traders will sell too exuberant a rebound on real conditions. Supply issues such as strikes or thescrap situation are more likely to be enti

46、rely overlooked during the downturn, if history is any guide.After 18 months of copper prices stuck in the mid-$5,000s/t, we think that the developers of the shakiest and earliest stage projects will be moved to defer their progress, and so we have effectively decided to eliminate supply from catego

47、ry 4 “possible” projects flowing through onto our balance.Although we only allowed 20% of these types to come in previously, the number and scale of them means we get a decent repair (150-600ktpa) to the balance from 2021 onwards, allowing meaningful deficits to re-emerge, and prices to lift back to

48、wards the mid-$7,000s/t.10 July 20195Macquarie ResearchNorth American Base MEquitiesFig 9 Copper has a way to go 90th percentile line is at$5,200/tFig 10 Outlook for copper prices shifts down on global industrial growth and thus demand deteriorationCopper costs and prices ($/lb)PriceLower QuartileCo

49、pper price forecasts ($/t)480440400360320280240200160120804009,0008,0007,0006,0005,0004,0003,0002,0001,0000Median Quartile Upper Quartile Ninth Decile19801984 1988 1992 1996 20002004 20082012 2016NewOld forecastSource: Wood Mackenzie, LME, Macquarie Commodities Strategy, July 2019Source: LME, Macqua

50、rie Commodities Strategy, July 2019Fig 12 Deficits too shallow to matter nearby, weak demand picture especially weak China does the damageFig 11All those disruptions and no one to careCopper Balances (kt)Copper mine disruptions (kt)4003002001000-100-200-300-400-500-6008,000150010.0%7,5008.0%10007,00

51、06.0%6,5004.0%5006,0005,5005,0002.0%00.0%Concentrate Balance Adjusted balanceLME Cash Price ($/t)2004 2006 2008 2010 2012Engineering/Technical Slow ramp-upOre GradesOther2014 20162018Strikes/Stakeholder WeatherPrice-relatedAnnual disruption rate %4,5004,000Source: WM, company reports, media, Macquarie Commodities Strategy, July 2019Source: LME, WM, ICSG, Macquarie Commodities Strategy, July 201910 July 201962016201720182019F2020F2021F2022F2023F2024FMacquarie ResearchNorth American Base MEquitiesZincEvent horizonZinc cont