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December 10th, 2021 | 13:54 CET

Bayer, Almonty Industries, JinkoSolar - Still considerable room for improvement

  • Tungsten
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Inflation is growing relentlessly. In November, Germany's barometer for price increases climbed to 5.2%; a level last reached 29 years ago. Rising energy prices and exploding commodity prices are found to be the culprits here. Given the energy turnaround, the materials required for this, such as lithium, copper and cobalt, are in fact close to their highs. However, tungsten, which will be essential for electromobility in the future, still has some catching-up potential.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: BAYER AG NA O.N. | DE000BAY0017 , ALMONTY INDUSTRIES INC. | CA0203981034 , JINKOSOLAR ADR/4 DL-00002 | US47759T1007

Table of contents:

    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

    Full interview


    Almonty Industries - Growing demand

    Climate activists want it just as much as politicians - the switch from an internal combustion engine to a battery-powered automobile. This demand, whatever the cost, is driving cobalt demand and price. By contrast, the conditions under which the metal is mined, mainly in the Democratic Republic of Congo, are swept under the carpet. There is extreme environmental pollution and children who work in dangerous, illegal mines at the risk of their lives, while gangs finance themselves with the cobalt business.

    If the CEO of Almonty Industries has his way, this trend should soon end. For Lewis Black, CEO of the Canadian company, the switch from cobalt to tungsten is drawing ever closer. Tungsten is extremely heat resistant and offers advantages both in terms of battery charging performance and safety. Tungsten also allows more nickel to be incorporated into batteries for e-cars, which in turn extends their range.

    The man should know, after all, Almonty Industries is building the world's largest tungsten mine in Sangdong, South Korea. The groundbreaking ceremony took place in the second quarter of this year, and the financing was completed with a capital increase of EUR 9.4 million. The debt capital is contributed by the Frankfurt KfW-IPEX Bank in the amount of USD 75.1 million.

    After full utilization, the plant's potential is 1.2 million rocks, while only about half will be exploited at the beginning. From the end of 2022, the mine is expected to produce around 30% of the tungsten supply outside China. Besides the Austrian Plansee Group, CEO Lewis Black is the second-largest shareholder of Almonty Industries. In addition, Deutsche Rohstoff AG owns around 12.2% of the promising company, which in addition to the main project in South Korea, is also active in Spain and Portugal. You can read a detailed interview with the CEO of Almonty Industries, Lewis Black..

    Bayer AG - Legal risks weigh heavily

    Pharmaceutical and agricultural giant Bayer cannot get out of the negative headlines. The rating agency Moody's has lowered the outlook from stable to negative because of the existing legal risks. The rating was confirmed at Baa2. According to the agency, there is a risk of a higher payout concerning the swelling settlement proceedings in Germany and the US over the crop protection product glyphosate. Dow Jones Newswires reports that the litigation is costly and dampens Bayer's flexibility in stocking its pharmaceutical pipeline. In addition, uncertainty is high, he said. Last but not least, Bayer's reputation has been damaged, he said.

    On an operational level, the Leverkusen-based company was able to announce the launch of the Carbonview project. The platform is an industry-unique digital solution that helps farmers in the US measure the carbon footprint of their supply chain, he said. It establishes the carbon footprint of end products, enabling them to increase the sustainability of supply chains and reduce the environmental impact of agriculture. From a technical perspective, the stock is approaching the all-time low at EUR 39.90. Due to the uncertainty, there is no reason to invest here.

    JinkoSolar - Clearly shaken

    The share of JinkoSolar, a leading global supplier of solar modules, has also only known a downward course in recent weeks. After an interim high of USD 66.28 at the end of November, the stock plummeted to below EUR 40. So far, the support at this level has held, but a further test does not seem unlikely.

    Operationally, the Chinese company has landed several orders recently. The latest order with a volume of 360 MW comes from one of the largest traders on the Israeli market, Tadiran Solar Ltd. It provides for the delivery of the latest N-Type TOPCon solar modules called Tiger Neo from 2022 to 2023.

    Electromobility requires many raw materials such as copper, lithium and nickel. According to experts, the controversial cobalt could be replaced by tungsten. Here, Almonty Industries is leading the way and is building a tungsten mine in South Korea that can cover 30% of the demand outside China. Less promising, however, are the shares of Bayer and JinkoSolar.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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