Market Update

General - Syrah - Mineral Resources - Metro

Good afternoon

German car sales falling strongly in June…

Mrs.von der Leyen should be a very good choice for the EU, I think….not everybody agrees!

Mrs.Kramp-Karrenbauer new Minister of Defence….hmmmm???? On the 1st of April, I would have taken this as an April-joke….these days, it seems to be true, as she was sworn in today…

Macron is fighting his tech-tax out with the US…about time, that the tech giants pay their fair share of tax! Good on him - fight on, please!

Many comments re the strong run of nickel again…Nobody believes, how strong it is! Well I could not believe for how long it has been so cheap! I think the answer to the recent rise might be a very easy one: Supply/demand is reasonably balanced - perhaps a small supply-deficit….somebody might just be taking a view, accompanied by some short-covering? On a 3-year view, I have absolutely no doubt, that nickel will be trading higher than today - and at times of ultra-low interest rates, it might just make sense for some consumer or a hedge-fund to build some stocks in Ni!

Gold just does not want to come down! up a few $ today, despite a relatively strong US$. For the last month or so, we have had the same pattern: every reaction gets bought quickly - and with rising lows. We are on the verge of making a new, recent high today. Gold ETF_holdings are at their highest since April 2013….The GDXJ in the States pretty strong and making another high today.

US-housing industry is a bit weaker….bonds very strong today across the globe.

Syrah - the Quarter just ended was another, relatively bad one for them. I have a lot of time for the Chairman - but this company looks not good…they have raised money the other day - so financially, they are currently very strong. But perhaps more important: They ssem produce the wrong type of graphite, and recoveries remain disappointing. They are ticking two boxes of issues, which usually are a NO-NO! I have lost confidence in them, and I have not enough vision perhaps to see them getting it right.

Metro Mining - announced a reserve increase today….Proven Reserves are now 13 years at the expanded rate of 6 millt p.a.-more than enough - and they have a lot more material of lower quality. I think the market might be concerned with pricing of their product, bauxite , as well as production costs. I expect, that both issues will be shown to not exist in the forthcoming Quarterly. Also, some investors might fear for another equity-raising associated with the near-doubling of production? Again, I think positive numbers in the Quarterly will also alleviated this concern. China needs bauxite - and tehy do not have enough of it, relying mainly on Guinea to fill their supply-gap. I have not been able to find out, what production costs in Guinea actually are - but I very much doubt, whether total costs incl transport on arrival in Shanghai will be any cheaper than from Metro in Northern Australia!

Mineral Resources - the Australian Fiancial Review published an article today, saying, that Stage 2 of the Wodgina lithium development would not yet have approval to go into production, due to seepage from residues in the tailings dam into the groundwater. According to the company, this seems to be formally correct. The company also states, though, that the tailings dam is performing in line with engineeringa nd expectations. They state, that as part of the comissioning, usually water is being used, not ore - this is very common for all new plants. This process does certainly create a much more fluid residue, than operation of the plant with ore would result in. Makes sense to me - so most probably, no reason to panic. I think the weakness in MIN today is a function of the market being extremely cautious, once something with the tailing dam is not in order - this follows the terrible drama in Brazil 7 month ago. Most probably, we have a typical storm in a teacup here!

Have a nice evening

Schröder Equities GmbH


80538 München

Tel. +49-89-4613440-0

Fax +49-89-4613440-10




eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder


The information contained in this communication is confidential and is intended only for the use of the addressee. Unauthorised use, disclosure or copying is strictly prohibited. If you have received this communication in error, please delete it and notify us by telephone at +49-89-4613440-0, by fax at +49-89-4613440-10 or by e-mail at immediately. Please note that this communication does not constitute and may not be construed as investment advice and / or referral to buy or sell financial instruments. Unless specified otherwise, the views expressed in this communication are solely subjective notions of the individual sender and / or the entity or individual stated as the author of any information submitted. Performance in the past may in no case be considered as an indication for future performance. Please also note that Schröder Equities GmbH and / or its officers or employees may have interests in financial instruments referred to this communication. A current list of shareholdings can be emailed on request. Furthermore, our clients are hereby informed that Schröder Equities GmbH renders advisory services to Nestor Australien Fonds, an investment fund administered by Nestor Investment Management S.A. Luxemburg. Please also note that e-mails can be intercepted by