Nordex, Almonty Industries, Rheinmetall - Dramatic developments

Almonty Industries - More in demand than ever

The trade war between the West and countries like China, Russia, and Iran is escalating, and the battle to secure supply chains of critical raw materials is entering the next round. In late May, the US Department of Defense (DoD) published a final regulation restricting the DoD's purchase of certain metals and magnets from the "covered countries" Iran, North Korea, Russia, and China to prohibit even earlier entries into the supply chain in these countries.

Despite comments referring to the still young domestic market for many "covered materials" - defined as samarium-cobalt magnets, tantalum metals and alloys, tungsten metal powder, and tungsten heavy alloys, or finished or semi-finished components containing heavy tungsten alloys** - the final regulation expands the restrictions on the sourcing of materials from covered countries. The current regulation requires that the covered materials not be melted or produced in the specified countries.

However, beginning January 1, 2027, the updated regulation prohibits the covered materials from being mined, refined, separated, smelted, or fabricated in any of the countries. Extending the ban to the location where these materials were mined is consistent with the US government's efforts to develop the domestic industrial base for critical minerals, magnets and metals and encourage their relocation.

Following this elementary news for the Western raw materials industry, the phones at tungsten company Almonty Industries are likely to have been ringing off the hook. The reason is that the Canadian company will begin production at the Sangdong mine in South Korea from the end of 2024. This mine will account for around 30% of global tungsten production outside China in the future. Initially, 2.3 tons of tungsten oxide are to be produced there annually, with the aim of gradually increasing this figure to 4.8 tons.

The current Almonty share price is CAD 0.60. In their latest study at the beginning of June, analysts at Sphene Capital issued a target price of CAD 2.13, corresponding to a potential upside of 255% from the current price.

Rheinmetall - Another order for the automotive division

It is well known that the integrated technology group excels not only in defense but also drives forward-looking technological and industrial innovations in the civilian markets. The Düsseldorf-based company is a renowned development partner and direct supplier to the global automotive industry.

The DAX-listed company received a significant order from a well-known international vehicle manufacturer with an order volume in the low three-digit million euro range**. The pump will be used in the manufacturer's hybrid-powered vehicles, with production having already begun and expected to continue until 2030. An accompanying service contract is also valid until 2045.

By providing hybrid components for e-mobility, Rheinmetall is making a long-term contribution to its own transformation commitment. This contract secures the Group considerable business in the field of e-mobility until 2030. Rheinmetall also has the opportunity to win further orders, as the customer plans to increase the proportion of hybrid and electric drives in its entire model portfolio.

From a technical chart perspective, the share is still in correction mode. An important support area in the EUR 475 range has already been successfully defended twice. Should this be breached on the downside, the next target would be EUR 440.

Nordex - New major order

After a brilliant comeback, with Nordex shares rising by over 70% to a new high for the year of EUR 15.77 between the end of February and mid-May 2024, momentum has once again increasingly left the renewable energy companies. Since then, the wind turbine manufacturer has corrected sharply and is currently testing the horizontal resistance level at EUR 11.40. A fall below this level would likely result in a setback to the EUR 10.50 range.

Although the MACD and RSI indicators are in oversold territory, the fact that good news continues to serve as a sell-off should continue to be an indication of falling prices. The share dropped by almost 2% on yesterday's trading day following the announcement of a new major order.

Aquila Clean Energy awarded the Hamburg-based company a contract to supply and install wind turbines in Spain. The order is for 21 N163/5.X wind turbines, which are to be installed in the Baza cluster in the province of Granada in southern Spain from summer 2025. The order also includes a 20-year premium service contract. An option which Aquila Clean Energy holds until August 31, 2024, allows the Company to increase the number of turbines for the project by up to 24 additional units.

The Baza wind farm cluster, which extends over eight sites between the cities of Granada and Almeria in Andalusia, will be equipped by the Nordex Group with turbines from the Delta4000 series on 108-meter-high tubular steel towers. The cluster's planned commissioning is scheduled for 2026.

Despite the publication of a significant order, the Nordex share continues to fall. Rheinmetall secured access to the lucrative electromobility sector with a major order. Analysts see a price target of 255% for the Almonty Industries share.