Close menu




July 8th, 2021 | 11:41 CEST

K+S, Theta Gold Mines, Varta - Explosion in construction materials and raw materials!

  • Commodities
Photo credits: pixabay.com

The price rally in essential commodities continues. An acute shortage of building materials has caused some sharp price increases on construction sites. As reported by the Federal Statistical Office, in May 2021, solid structural timber increased in price by 83.3% year-on-year, roof battens by 45.7% and structural timber by 38.4%. The increased prices of wood and steel and industrial metal are driving up construction costs: reinforcing steel in bars was 44.3% more expensive in May 2021, and reinforcing steel mesh cost 30.4% more than a year ago. The main reasons for the rising lumber and steel prices are likely to be rising demand at home and abroad during the Corona pandemic and problems in the supply of raw materials. By comparison, the producer price index of industrial products rose 7.2% over the same period - the most significant monthly increase in 25 years. Who are the beneficiaries of the shortage rally?

time to read: 4 minutes | Author: André Will-Laudien
ISIN: K+S AG NA O.N. | DE000KSAG888 , THETA GOLD MINES | AU0000035701 , VARTA AG O.N. | DE000A0TGJ55

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

     

    K+S - Like a phoenix from the ashes

    Kali & Salz was founded in 1889, making it one of the oldest commodity stocks with German roots. Today, the Company is one of the world's leading suppliers of potash and magnesium products for agricultural and industrial applications. The product range includes specialty and standard fertilizers, various plant care and salt products, and products for animal hygiene and several basic chemicals such as caustic soda, nitric acid and sodium carbonate.

    From the perspective of the drastic increases in raw material prices, K+S is currently very well positioned. That is because the K+S Group occupies a market-leading position for potash products in Europe. In the case of fertilizers containing magnesium, the Company is even the global market leader. In 2012, construction work began on the new potash site in the Canadian province of Saskatchewan, in which K+S invested about EUR 3 billion. The expansion took place at a time of weak potash prices and led to a high level of debt; potash prices did not recover until the end of 2020, and so the K+S share price went downhill from 2015.

    Currently, however, potash prices know no stopping. New 10-year highs have been marked in the USA, and the rally is even more pronounced in Brazil. While prices in North America are still below the USD 600 per ton mark, this mark has now been broken in the largest South American country. Thus, the price of potash and all fertilizers there has risen drastically within a few weeks; since the beginning of the year, it has now risen by more than 100%.

    The K+S share has had an exciting journey since October 2020. The price has broken out to the upside with plus 100% in 9 months. After a short consolidation, this could be just the beginning, given the current inflation in commodities. Therefore, stay invested.

    Theta Gold Mines Ltd. - Search for raw materials in South Africa

    Now it is here, inflation. For a long time, central banks have been able to keep interest rates low, but will this still be possible in the future? Rarely has there been such an increase in the price of critical commodities and construction materials as in 2021, with disrupted supply chains resulting from mine shutdowns during the Corona pandemic. But where do things go from here?

    Australia's Theta Gold owns over 62,000 hectares of gold mining claims in South Africa and a total of 43 historic properties, most of which are located within the Eastern Transvaal Gold Field northeast of Johannesburg. Exploration is directed at high-grade, near-surface gold reef deposits at the Pilgrims Rest and Sabie Gold Fields.

    In July, the Company announced the continuation of development work recently commenced following the release of the first underground pre-feasibility study (PFS) at TGME, Pilgrims Rest. The Phase 1 underground project will be completed by Q1 2022. The objective is to upgrade the Rietfontein mine scoping study to a PFS as well. The gravity survey required for this has already been completed in May 2021. Current exploration for ore reserves at Theta Gold is focused on both underground and surface deposits.

    Post-validation of historical tunnel samples is required to provide definitive confirmation of project progress. Clean-up work around the mine site has now commenced in preparation for decommissioning the old gold plant. Further metallurgical optimization work is still required before the process design can be finalized. A safety expert works on-site to develop a health, safety and environmental management system for future operations.

    The Theta Gold share is actively traded in Frankfurt. As the resumption of gold production may be on the agenda as early as 2022, an initial position should be established.

    Varta - New site in Nördlingen brings fantasy

    Varta is also highly dependent on raw materials for its production because Varta is an expert for different battery systems such as wireless headphones, batteries for drills and robotic lawnmowers, power for insulin pumps, and measuring devices in the industry.

    And batteries for electric cars are also soon to roll out of the factory. To this end, the Company has opened its new lithium-ion cell factory at the Nördlingen site. The new building with a production area of 15,000 square meters is an important step for Varta in its growth strategy. With the new factory, the Company now has a total production area of 60,000 square meters and thus the ideal infrastructure for further growth. Customer orders from German premium manufacturers have already been received, and development partnerships are now being launched.

    Varta is in a tough technology competition. If you want to be at the forefront, you have to keep presenting new and better batteries. Of course, this also requires the political will and the vision to keep innovative power and technology in Europe, especially in Germany as an industrial location.

    After its consolidation in May, the Varta share has picked up speed again and rose to a high of EUR 145. From a chart perspective, the all-time highs at EUR 160-180 are now on the agenda again. Currently, the share price has entered a holding pattern again. The market is probably expecting further battery news. Overall, the valuation of the Varta share is high - but the opportunities are also extraordinary.


    An investment in commodity and industrial stocks is very cyclical and fraught with risk. Those who invest in dynamic stocks like K+S or Varta are exposed to high trend dynamics. Theta Gold Mines is still in the early stages of development, but their history makes the projects very promising.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.


    Der Autor

    André Will-Laudien

    Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

    About the author



    Related comments:

    Commented by Stefan Feulner on September 27th, 2022 | 13:47 CEST

    Barrick Gold, Tocvan Ventures, Newmont, Glencore - Long-term positioning in gold makes sense

    • Mining
    • Gold
    • Commodities
    • Investments

    The FED's recent interest rate hikes and Chairman Jerome Powell's statement sent both equity and precious metals markets into the valley of tears. By all means, the monetary guardians want to curb rampant inflation. Whether this will succeed seems at least questionable. After all, it should not be forgotten that this would put an end to the already sputtering engine of the global economy. In addition, many already highly indebted countries are falling into ever greater problems due to higher interest payments. Thus, it is time to take a long-term, anticyclical position in the precious metals sector.

    Read

    Commented by Armin Schulz on September 26th, 2022 | 12:41 CEST

    BASF, Manuka Resources, Varta - Buy when the cannons thunder!

    • Mining
    • Commodities
    • Batteries
    • chemicals

    That is Warren Buffet's motto, and the Oracle of Omaha has done very well with it over the past decades. In the biggest crises, the investor always made a bold move, while others waited rigidly in fear. This could also be observed during the last Corona Crash. Many waited for lower prices, or at least a retest of the lows, which never came. At the moment, it seems to be the case again that no one wants to buy shares, and this is precisely where the opportunity lies. No one can predict the exact low, but if you want to be there, you have to get in at some point. We look at three companies that have great potential.

    Read

    Commented by Stefan Feulner on September 26th, 2022 | 10:28 CEST

    BYD, Globex Mining, Newmont, Freeport-McMoRan - Copper with doubling potential

    • Mining
    • Copper
    • Gold
    • Commodities
    • Electromobility

    The price of copper has lost around a third since March of the current stock market year. Investors are selling the metal, which is known as an economic barometer, due to global recession fears and concerns of a drop in demand. However, due to the great importance of copper with regard to the energy turnaround, the tide is likely to turn again soon. Mining companies and commodity traders are already warning of a massive shortage of the world's most important metal. Goldman Sachs expects the price of copper to reach USD 15,000 per ton by 2025, which would mean a doubling of the current level.

    Read