February 27th, 2023 | 14:50 CET
Mercedes-Benz, Almonty Industries, Rheinmetall - New battery trend from Korea
Table of contents:
"[...] 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
At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Mercedes-Benz: Circular economy at the limit
Mercedes-Benz is a time-honoured company that has reinvented itself in recent years. In the meantime, the Swabians are even phasing out the model designations that were introduced for e-cars. The new G-Class is also available as an electric model without adding a name. Mercedes is thus taking into account that electric cars are no longer exotic. And because the first electric cars will soon end up on the scrap heap, Mercedes is also investing in recycling. Batteries, in particular, are to be dismantled and their components reused. A plant has been built at the Kuppenheim site not far from the town of Rastatt in Baden, which aims to score points with a recycling rate of up to 96%. At present, the project is still a pilot plant, which is to be further expanded in order to ultimately close the recycling loop. The project is being scientifically supervised by the Karlsruhe Institute of Technology (KIT).
Mercedes-Benz is hitting a nerve with its quest for recycling. An intact recycling economy around industrial products has been the wish of environmentalists for decades and makes sense, especially against the background of scarce raw materials. However, only materials that have already been used can be recycled. New battery compositions could continue to rely on raw materials. One of these raw materials is tungsten.
Almonty Industries: Tungsten hope from South Korea
The metal, primarily known as the filament in light bulbs, has numerous other applications, such as in alloys. Meanwhile, tungsten is increasingly becoming a battery metal as well. Thanks to tungsten, batteries are expected to have a very high power density and the ability to be charged quickly. Batteries for e-cars should be able to be charged within less than 5 minutes. At present, the tungsten market is still strongly dominated by China. However, the Sangdong mine is currently being built in South Korea under the management of Almonty Industries - it is set to become the largest production facility outside China.
Recently, CEO Lewis Black presented Almonty at the 6th International Investment Forum (IIF). The CEO looks back on a good year for tungsten - the price for the metal recently increased by close to 50%. The Sangdong mine is scheduled to go into production from 2024. While there have been some delays to the schedule recently, Black emphasized that they prefer to plan conservatively in order to surprise positively afterwards rather than communicating overly ambitious schedules to the outside world. However, he said the budget remains on track despite the recent delays. Almonty Industries' stock has been in favourable waters again for several weeks - a further comeback is not ruled out.
Rheinmetall: War winner has further potential
Demand for tungsten is also rising: The war in Ukraine has caused global spending on armaments to soar. Shares like Rheinmetall are booming. Investors are already expecting further orders. Statements such as those made by the new Minister of Defence, Boris Pistorius, suggest that shareholders of defence stocks may well have even higher expectations for the share prices: Pistorius cited NATO's target of 2% military spending measured against economic output as a possible new spending minimum. Over a one-year period, the Rheinmetall share has gained 147%.
With a view to the coming months, all the signs look as if Rheinmetall could continue to grow. But defense companies are also dependent on raw materials. The tungsten market, which is primarily dominated by China, could have potential. With production set to start in 2024, the timing could be perfect for Almonty Industries. From today's perspective, the stock still has significant reserves and thus offers advantages over obvious crisis winners.
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 hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is a concrete conflict of interest.
The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.