July 9th, 2021 | 14:51 CEST
Volkswagen, Carnavale Resources, Daimler - Prepared for the future
In addition to the global economic recovery, a long-term structural change towards a climate-neutral future is driving raw material prices. Copper is considered a key element for electromobility and renewable energies. It is used in the production of batteries, electric cars, solar modules and wind turbines. Other essential materials such as nickel, cobalt and lithium are primarily produced in China. Demand threatens extreme shortages and skyrocketing prices. Profit from this cycle.
time to read: 3 minutes
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Author:
Stefan Feulner
ISIN:
VOLKSWAGEN AG VZO O.N. | DE0007664039 , CARNAVALE RESOURCES LTD | AU000000CAV5 , DAIMLER AG NA O.N. | DE0007100000
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
Author
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.
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Balanced portfolio
The exploration Company Carnavale Resources strikes a chord with its investment strategy. The diversified portfolio of the Australians includes four promising early-stage exploration projects. In addition to two gold projects, the focus is on two deposits where previous drilling has proven high levels of industrial metals such as copper, nickel and platinum.
Both nickel and copper are essential for the transition from combustion engines to electric cars. Nickel plays a crucial role in the carmakers' battle to extend the range of the e-car. The more nickel the battery has, the more efficient the vehicle. The global primary nickel supply is dominated by Indonesia, which supplies 27% of the world market. However, the main customer for nickel produced in Indonesia is China. Chinese corporations already have stakes in Indonesian mining companies or hold long-term offtake contracts, leaving the Western world to look for other alternatives. The increasing demand for nickel from the auto industry, experts predict 23% by 2030, once again demonstrates the industry's need.
With the Barracuda project with nickel, copper and platinum group metals and the Grey Dam nickel project, Carnavale Resources has identified two promising deposits that could satisfy the demand for raw materials for the energy transition, at least in part.
Protected from inflation
Soaring inflation is the dominant theme in the markets right now. Will the Fed react, or will it continue to push the ultra-loose monetary policy in favor of economic growth. Gold and silver have always been considered inflation and capital protection. Here, too, Carnavale Resources can shine with two promising projects located near Kalgoorlie in Western Australia.
The most advanced of these is the Kookynie gold project, where the third gold drill program has already been completed. The results here were simply impressive. Extremely high-grade intercepts of two meters each with 16.25 g/t and 3.34 g/t were detected. In addition, the exploration company expects to receive new results from the already-completed aircore drilling in the coming weeks.
Currently, Carnavale Resources has approximately EUR 2.5 million in cash, sufficient to meet its 2021 drill targets. The Company also intends to continue evaluating interesting exploration and development projects that add value to the portfolio. Overall, Carnavale Resources has an excellent mix to participate in the various trends. However, the development of individual deposits is still in the early stages. Therefore, investment is suitable for speculative investors. When ordering, one should not forget to limit.
Optimistic outlook
Though problems with the procurement of semiconductors have still not been resolved, Daimler headquarters is exuding optimism ahead of the release of its second-quarter figures. It was announced in advance that Daimler was able to increase deliveries of Mercedes-Benz passenger cars by almost 25% to 1.16 million units compared to the same period last year, which was heavily affected by the Corona pandemic.
Analysts estimate group revenue at just under EUR 39.9 billion, according to Bloomberg. In addition, after a loss of EUR 708 million before special items, operating profit for the current period is expected to reach EUR 3.8 billion. For the full year, the experts surveyed expect an increase in sales of 12% to EUR 173 billion and an operating profit of EUR 17.3 billion. That would be equivalent to doubling the previous year's result.
Expensive offense
Harsh penalties for the auto giants Volkswagen and BMW. Because of illegal agreements on AdBlue tanks for better exhaust gas cleaning, BMW is to pay almost EUR 373 million, Volkswagen about EUR 502 million. The EU Commission announced this in Brussels on Thursday. Daimler, on the other hand, will get off scot-free because of the leniency program.
For the Volkswagen share, it is a matter of defending the EUR 200 mark. Should this break, a slide below the EUR 180 mark would be possible.
The carmakers are accelerating the change in their production from combustion engines to battery-powered electric cars. The primary beneficiaries of this strategy are producers of the scarce metals. Carnavale Resources has several promising deposits in Australia and long-term potential. Volkswagen and Daimler are currently in correction mode, and one should now wait and see.
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