Almonty Industries, thyssenkrupp, Nordex – Perfect news!

Almonty Industries – On the sunny side

While industrial companies face significant challenges in terms of the security of supply of rare earths, producers of such raw materials, such as Almonty, are on the sunny side. Scarce supply and rising demand are driving up prices.

A recent Bloomberg report underscores the growing global priority placed on securing critical raw materials. According to information from the news agency, the state-owned development bank DCF, together with various partners, is considering the creation of a USD 5 billion fund to invest in projects worldwide focused on the extraction and processing of these critical raw materials. The fact is that the world remains heavily dependent on China, which controls 80% or more of global reserves.

That is why investors are particularly focused on companies positioned to benefit from this geopolitical and economic shift. A prime example is Almonty Industries, which is set to begin operations at the largest tungsten mine outside China later this year. According to current plans, the Sangdong mine is expected to double its capacity by 2027, ultimately accounting for up to 40% of tungsten output outside China.

In the second phase of expansion, a nano-tungsten oxide plant will also be commissioned to convert enriched tungsten concentrates into tungsten oxide. This will deepen the value chain, which will significantly increase profitability. Another advantage is the low production costs and long-term customer contracts.

In addition, demand for tungsten sourced outside of China, Russia, and Korea is expected to rise significantly in the medium term, driven by import bans in the US set to take effect in 2027. At the same time, the US government has granted a tariff exemption for tungsten, further incentivizing alternative supply chains.

Thyssenkrupp – Lots of good news

The Company has exposure to raw materials, including critical raw materials, across several of its business areas, including plant and mechanical engineering, energy, and mobility. The German group is also actively researching and developing processes for recycling metals and critical raw materials, which could eventually include rare earth elements in the long term, in order to reduce dependence on imports.

Last year, it was the future prospects of the hydrogen division - now listed on the stock exchange as thyssenkrupp nucera, with a roughly 50% stake held by the Group - that drove investor interest. In recent months, however, developments related to the Group's restructuring have taken center stage. The share price has nearly quadrupled during this period.

This week, the planned sale of the steel division became more concrete: the Indian steel company Jindal Steel International expressed its interest. In addition, an extraordinary general meeting paved the way for the spin-off of the Thyssenkrupp Marine Systems division. This unit is a global market leader in non-nuclear submarines, but also builds frigates and corvettes. TKMS AG & Co. KGaA employs around 8,200 people and is expected to enter the regulated market of the Frankfurt Stock Exchange later this year.

Nordex – New orders provide a boost

The German wind turbine manufacturer was among the top performers on the German stock market yesterday, with a gain of just over 4%. A large order from Latin America caused the share price to rise. There has also been a pleasing level of incoming orders in recent months.

This appears to have offset the summer's price dip. Uncertain political conditions regarding the expansion of renewable energies had previously dampened investor sentiment. On average, analysts are assigning the shares a price target of EUR 23, which corresponds to an upside price potential of around 15%.

The trend is your friend

The long-term increase in demand in the sectors discussed points to further upside potential for the relevant stocks. Almonty Industries, in particular, is well-positioned for growth given its exceptional status as the future largest tungsten producer outside China. Despite the recent share price rally and a market capitalization of around CAD 1 billion, analysts continue to see upside potential of over 80% for the stock.