Basic Materials Roundup: Market Talk

The latest Market Talks covering Basic Materials. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

0801 GMT - Antofagasta's results narrowly beat expectations, RBC Capital Markets analysts write. The Chilean copper miner kept its guidance unchanged which means capital expenditure should rise sharply over the remainder of the year, they write. Capex will be split 42:58 over the two halves of the year, they add. A dividend of 16.6 cent a share is in line with its 35% payout ratio and 5% ahead of consensus expectations, the analysts write. Shares trade up 0.7% to 2126 pence a share. (adam.whittaker@wsj.com)

0754 GMT - Lanxess's cut to its full-year adjusted earnings guidance comes as a surprise, but its new expectations look realistic, Citi analysts say in a research note. The company was one of the few among German diversified-chemical groups not to issue preliminary results this quarter, the analysts say. Citi interpreted this as a sign its outlook would be around consensus expectations for Ebitda excluding exceptional items of 572 million euros, the analysts say. However, Lanxess cut guidance for full-year Ebitda excluding exceptional items to between 520 million and 580 million euros, 4% below the consensus at the mid-point of the range. "That being said, the new outlook looks realistic to us and should largely address the earnings risk, assuming no further deterioration in the macro," Citi says. Shares fall 2.1%. (adria.calatayud@wsj.com)

0724 GMT - Jindal Steel's sales volume growth is poised to be supported by some tailwinds, Elara Securities (India)'s analysts say in a research report as the brokerage maintains an accumulate rating. These tailwinds include improved product mix, further ramp-up at existing facilities, and completion of ongoing expansion projects, the analysts say. The steel producer's value-added product portfolio is likely to strengthen further from its recently commissioned galvanizing line at Angul plant in India's Odisha. Also, the near-term impact of weak steel prices should be cushioned by benign coking coal costs. The brokerage raises the target price to INR1,050.00 from INR991.00 to reflect valuation roll-over. Shares are 2.4% lower at INR970.70. (ronnie.harui@wsj.com)

0325 GMT - The future of South32's Mozal aluminum smelter is increasingly in doubt, although a suspension is the "worst case scenario," according to RBC Capital Markets analyst Kaan Peker. RBC expected Mozal production would be maintained around 350,000 metric tons in FY 2026 under a new, higher-cost electricity supply agreement. Peker estimated a 15%-20% energy cost increase. South32's revised production guidance of 240,000 tons implies a 4%-5% drop in FY 2026 Ebitda, Peker says. RBC's valuation on South32 drops by roughly 1%. "Given that Mozal is already a higher-cost operation, the worst case scenario would be for the smelter to be shut-down and alumina is sold into the spot market," he says. RBC has an outperform rating and A$3.50 target on South32. The stock is down by 4.7% at A$2.915. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0142 GMT - Petronas Chemicals' earnings outlook is likely to be weighed by weak polyolefin prices due to subdued near-term demand, Kenanga IB analyst Lim Sin Kiat says in a note. China's policy to reduce excessive competition could help ease oversupply, but there's no confirmation of capacity cuts, he warns. Urea prices should stay firm, supported by China's export restrictions, but ammonia and methanol prices are likely to remain under pressure from excess supply, he says. Management guided its Pengerang Petrochemical Complex is expected to run at 80%-90% utilization rate from 3Q, but Lim thinks profitability is unlikely to recover quickly, due to unfavorable spread. Kenanga cuts the target price to MYR3.36 from MYR3.40, and keeps a market perform rating on the stock. Shares are 0.6% lower at MYR3.58. (yingxian.wong@wsj.com)

0139 GMT - Petronas Chemicals' outlook may remain challenging, with oversupply and weak downstream demand expected to keep margins under pressure across key segments, TA Securities analyst Lee Yun Leon says in a note. While firmer urea prices and steady methanol markets offer some near-term relief, its olefin and derivatives segment may face headwinds from ample supply and muted demand, he says. Its specialties segment should see stable industrial and infrastructure demand, but softening construction and cautious auto markets may limit its upside, he adds. Lee cuts Petronas Chemicals' 2025-2027 earnings forecasts by 35%-42%. TA Securities downgrades Petronas Chemicals' rating to sell from hold and cuts its target price to MYR3.51 from MYR4.11. Shares are unchanged at MYR3.60.(yingxian.wong@wsj.com)

1827 GMT - Gold futures turn positive, breaking a two-day losing streak and making it six out of the past nine trading sessions that gold finished higher. Giving gold support were comments from Treasury Secretary Scott Bessent calling for a rate cut of half a percentage point in September. But on the other hand, the latest CPI data showed year-over-year core inflation up over 3%, with the meats, poultry, fish, and eggs category up 5.2% and electricity up 5.5% versus last year. The inflation target of 2% is likely no longer the focus for the Federal Reserve, says John Caruso of RJO Futures. Front-month gold closes up 0.3% to $3,358.70 per troy ounce. (kirk.maltais@wsj.com)

1631 GMT - Gold stocks are finally reflecting gold's popularity after years of underperformance, UBS says. The GDX Index of gold mining stocks has outpaced the price of gold by more than 40% year to date. Between 2019 and 2024, GDX underperformed the gold price by about 50%, the analysts say. Improved earnings and balance sheets are helping the companies' stocks, and the analysts expect to see more buybacks and organic growth projects in the second half of the year. There could even be more mergers and acquisitions, though the analysts note that disciplined organic growth and regional consolidation seems to be more popular right now. (katherine.hamilton@wsj.com)