《WHAT'SNEXT：LATAMM&MWEEKLY1031.ppt》由会员分享，可在线阅读，更多相关《WHAT'SNEXT：LATAMM&MWEEKLY1031.ppt（20页珍藏版）》请在三一办公上搜索。
1、Buy,Hold,Buy,Buy,Buy,Buy,Deutsche BankMarkets Research,Global Emerging MarketsBrazilMetals&Mining,PeriodicalWhats next,Date29 October 2012Rodrigo Barros,Latam M and(iii)the,Research Analyst(+55)11 2113-Leandro CappaResearch Analyst(+55)11 2113-Top picksGerdau(GGB.N),USD8.75Companies FeaturedVale(VAL
2、E.N),USD18.28Gerdau(GGB.N),USD8.75Ternium(TX.N),USD20.70CSN(SID.N),USD5.40Usiminas(USIM5.SA),BRL9.903Q12 Earnings calendar,outlook for pellets in Europe next year.Crystal ballWe estimate January 2013 EBITDA/t for Chinese HRC at USD21(+USD2 vs.previous week)and for European HRC at USD44(-USD9 vs.prev
3、ious week).Assuming current prices remain stable,May 2013 EBITDA/t would be,respectively,USD19 and USD42.,CSNUsiminasGerdauTerniumMMXMagnesitaBradespar,Oct 31Nov 1Nov 1Nov 6Nov 7Nov 8Nov 11,Weekly recapThe main highlights from last week were:(i)IODEX closed on Friday atUSD120.5/dmt,USD3.0/dmt higher
4、 vs.previous weeks close,(ii)Valepublished 3Q12 results that were well received by the market,and(iii)President Dilma Roussef announced that the reduction in the IPI tax for lightvehicles will be extended to 31 December 2012.Valuation and risksWe value LatAm Metals&Mining stocks using DCF as a prima
5、ry methodology.For WACC calculation,we assume a 5%market risk premium and a 4%risk-free rate.For the steelmakers,we incorporate a multiple component tocalculate the target prices in addition to the DCF.Key risks include currency,project delays,overpaying for acquisitions,and slower-than-expected glo
6、baleconomic growth.More on valuation and risks on page 17._Deutsche Bank Securities Inc.All prices are those current at the end of the previous trading session unless otherwise indicated.Prices are sourcedfrom local exchanges via Reuters,Bloomberg and other vendors.Data is sourced from Deutsche Bank
7、 and subjectcompanies.Deutsche Bank does and seeks to do business with companies covered in its research reports.Thus,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor
8、 in making their investment decision.DISCLOSURES ANDANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1.MICA(P)072/04/2012.,29 October 2012Metals(ii)pre-buys in the previous years and(iii)changes inthe financing mechanisms.We expect sales of trucks to improve substantially next yearwhen banks start app
9、roving new loans(government subsidized)to this category.What is the outlook for pellets in Europe next year?World Steel Association forecasts that crude steel production in Europe will increase by2.4%next year,a scenario that we think may prove to be too optimistic.Ourconversations with refractory p
10、layers in Europe show that there is a possibility of crudesteel production in Europe to decrease by 5%or more next year.We expect Vale tomaintain some of its pellet plants idle next year as demand from Europe,a key marketfor pellets,is likely to remain subdued.,Page2,Deutsche Bank Securities Inc.,25
11、th,2012,29 October 2012Metals Recurring EBITDA 18%aboveestimates,Vale reported last night its 3Q12 results which were better than we projected:EBITDAof USD4.3bn(excluding provisions)was 18%above our forecast of USD3.6bn,driven byhigher than expected pellet prices,lower iron ore cash costs and higher
12、 than expectedbase metals volumes.Recurring EPADR of USD0.39 was in line with expectations,asthe higher EBITDA was offset by higher financial expenses than we estimated.We rateVale as a Buy due to upside to our DCF valuation but we acknowledge the next coupleof quarters should continue to be challen
13、ging for the company.VNC deal a surprise;New iron ore taxation impact cash costVale announced that it is finalizing a deal with Sumic Nickel Netherlands(which owns21%of VNC)to postpone the put option Sumic has on the VNC project from 2012 to2015.In addition,Vale said that it will increase its owners
14、hip of VNC from 74%to80.5%next quarter.Another key highlight of the 3Q12 results was that Vale startedprovisioning expenses for the new state mining taxes,which negatively impacted ironore cash cost by USD1.85/t in the quarter.Net/Net:More positive than negative surprisesOverall Vale was able to sho
15、w good results in an unfavourable economic environmentand we were positively surprised on the companys ability to sustain a high pelletpremium,quickly shift iron ore volumes from Europe to China and reduce iron ore costsdespite an increase in taxation.The main negative news of the quarter was the in
16、creasein mining taxes,which will negatively impact iron ore cash costs by cUSD2/t goingforward.Valuation and RisksOur target price is calculated using a DCF methodology(9.40%WACC,11.50%Ke,1.3company beta,5%market risk premium,5%risk free rate,30%debt in the capitalstructure,6%pretax Kd and 2.5%termi
17、nal growth(based on our knowledge of theasset base and expectations of long-term growth).Downside risks include lower-than-expected realized iron ore prices;lower economic and FAI growth in China;sustainability of industrial production recovery in developed countries;projectsexecution;sharp revaluat
18、ion of the Brazilian real and Canadian dollar and prospectiveM&A activity.Deutsche Bank Securities Inc.,Report published on OctoberPage3,29 October 2012Metals&MiningWhats nextImport parity calculationCRC premium at 13%,Figure 1:Hot rolled sheet domestic premium0,Figure 2:Cold rolled sheet domestic p
19、remium0,-10%,-5%discount,5%premium,10%,-10%,-5%discount,5%premium,10%,Source:Deutsche BankFigure 3:Rebar domestic premium0,Source:Deutsche BankFigure 4:Heavy plate domestic premium0,-10%,-5%discount,5%premium,10%,-10%,-5%discount,5%premium,10%,Source:Deutsche BankPage4,Source:Deutsche Bank,Deutsche
20、Bank Securities Inc.,29 October 2012Metals&MiningWhats nextCrystal ballM&M leading indicatorsSwap curve analysisRebar future pricing for January 2013 stands at USD592/t(+USD6 vs.previous week)and for May 2013,at USD587/t(+USD4 vs.previous week).Iron ore futures(SingaporeExchange)for the same dates s
21、tand,respectively,at USD116/dmt(+USD2 vs.previousweek),and USD114/dmt(+USD1 vs.previous week).Profitability outlookWe estimate January 2013 EBITDA/t for Chinese HRC at USD21(+USD2 vs.previousweek)and for European HRC at USD44(-USD9 vs.previous week).Assuming current,prices,remain,stable,May,2013,EBI
22、TDA/t,would,be,respectively,USD19 and USD42.Scrap vs.iron ore/cokeThe current ratio of scrap to iron ore/coke stands at 1.28(-9.0%vs.September),whilethe ten-year average is 1.26.According to our calculation,scrap is more expensive thaniron ore and coal at this time.Historical spreadsMetal spreads in
23、 the US suggest that the current spreads are below the long-runaverage.Price above raw material in Europe is higher than the long-run average andprice above raw material in China is also higher than the long-run average.Vale ports lineupThe current lineup of Vales ships suggests iron ore exports of
24、20.1mt in October2012(excluding Samarco).At the same time last month,export forecasts forSeptember were 22.6mt.,Deutsche Bank Securities Inc.,Page5,(USD/t),(USD/t),Jan-13,May-13,Dec-12,Nov-12,Mar-13,Jun-13,Feb-13,Apr-13,Jul-13,Jan-13,Apr-13,May-13,Mar-13,Dec-12,Nov-12,Jun-13,Feb-13,Jul-13,Jul-13,(US
25、D/t),(USD/t),Jan-13,May-13,Apr-13,Nov-12,Mar-13,Dec-12,Jun-13,Feb-13,Jul-13,Jan-13,Apr-13,May-13,Nov-12,Dec-12,Mar-13,Feb-13,Jun-13,(USD/t),Oct-10,Oct-11,Oct-12,Apr-10,Apr-11,Jun-10,Aug-10,Dec-10,Jun-11,Aug-11,Dec-11,Apr-12,Jun-12,Aug-12,Feb-11,Feb-12,(USD/t),12/16/10,01/15/11,02/14/11,03/16/11,04/1
26、5/11,05/15/11,06/14/11,07/14/11,08/13/11,09/12/11,10/12/11,11/11/11,12/11/11,01/10/12,02/09/12,03/10/12,04/09/12,05/09/12,06/08/12,07/08/12,08/07/12,09/06/12,10/06/12,29 October 2012Metals&MiningWhats nextM&M dashboardFigure 5:Crystal ball,Exihibit 1:Rebar futures620600580560540520500,Exihibit 2:Iro
27、n ore forwards120115110105100959085,8/25/2012,9/25/2012,10/26/2012,8/25/2012,9/25/2012,10/26/2012,Source:Bloomberg Finance LP and Deutsche BankExihibit 3:Chinese profitability555550545540535530525520,Source:Bloomberg Finance LP and Singapure Exchange LtdExihibit 4:European profitability6606506406306
28、20610600590,Chinese HRC cost,Current HRC price,European HRC cost,Current HRC price,Source:Platts,MetalBulletin,Bloomberg Finance LP and Deutsche BankExhibit 5:Scrap vs.iron ore&coke1.9,Source:Platts,MetalBulletin,Bloomberg Finance LP and Deutsche BankExhibit 6:Historical spreads,1.71.51.31.10.9,Spr
29、e a ds(USD/t)Slab-PigMetal Spread(Flat,USA)Blast Furnace Spread HRC,ChinaBlast Furnace Spread,EuropePig-Scrap ShreddedHRC-Slab,GermanyCRC-HRC,GermanyHRC US-Germany,Cur r e nt983182853595014410726,10y av1213452283417612810120,7y av130370228361911481032,5y av12136422334710615395-16,Scrap/(Iron Ore+Coa
30、l)Source:Platts,SBB and Deutsche BankExhibit 7:Ports lineup,10y average,Source:Platts,MetalBulletin and Deutsche BankExhibit 8:Pellet premium,(0 0 0 t)Ponta da MadeiraTubaraoItaguai,Oct-1 27,7136,9162,005,Nov-1 29,2937,8451,329,Tota l17,00614,7603,333,6560555045,Guaiba 3,425Tota l 2 0,0 5 9Source:Va
31、le and Deutsche Bank,3,3132 1,7 8 0,6,7394 1,8 3 9,40353025,20Pellet PremiumSource:MySteel,SteelHome and Deutsche Bank,Page6,Deutsche Bank Securities Inc.,29 October 2012Metals 100%payoutSouthern Copper published results above our forecasts mainly due lower than expectednet financial results and pos
32、itive equity income.Recurring EBITDA of USD845mn(54.5%margin)was 1%ahead of our forecasts while recurring EPS of USD0.63 was16%higher than our projection.The company announced it has paid USD316mn inlegal fees related to the Mineria Mexico dispute,which impacted its EBITDA and EPSthis quarter.,Deuts
33、che Bank Securities Inc.,Page7,(USD/wmt),(USD/t),5-Apr-11,5-Apr-12,5-Aug-10,5-Aug-11,5-Dec-10,5-Dec-11,5-Aug-12,5-Jun-11,5-Feb-11,5-Feb-12,5-Jun-12,19-Jun-11,19-Jun-12,19-Aug-12,19-Aug-11,19-Aug-10,19-Feb-11,19-Dec-10,19-Dec-11,19-Feb-12,19-Oct-10,19-Oct-11,19-Oct-12,19-Apr-11,19-Apr-12,5-Oct-10,5-O
34、ct-11,(USD/t),Jul-09,Jul-10,Jul-11,Jul-12,Jan-12,May-12,May-11,May-10,May-09,Nov-09,Nov-10,Nov-11,Nov-12,Jan-09,Jan-10,Jan-11,Mar-11,Mar-12,Mar-10,Mar-09,Sep-09,Sep-10,Sep-11,Sep-12,Jan-13,5-Oct-12,29 October 2012Metals&MiningWhats nextSector data,Figure 6:Iron ore prices2001801601401201008060SGX Pl
35、atts iron ore 1-month forward(USD/dmt),Figure 7:Freight price spread2015105,Vales iron ore fob Brazil(USD/wmt)Source:Platts and Deutsche Bank calculationsFigure 8:Iron ore contract pricingA200180160140120100806040Contract price CFR China(USD/dmt),Brazil-Australia spreadSource:Platts and Deutsche Ban
36、k calculationsQuarterly pricingIron ore spot price 62%Fe(USD/dmt),TTM average spread,Source:Platts,SGX AsiaClear and Deutsche Bank calculations.Iron ore futures pricing as of 13 July 2012,Page8,Deutsche Bank Securities Inc.,(mt),(mt),Oct-11,Dec-10,Dec-11,Oct-10,Aug-11,Aug-10,30-Jun-10,30-Jun-11,31-D
37、ec-10,31-Dec-11,28-Feb-11,29-Feb-12,30-Jun-12,30-Apr-10,30-Apr-11,30-Apr-12,31-Aug-10,31-Aug-11,31-Aug-12,31-Oct-10,31-Oct-11,(USD/t),(mt),20-Jun-11,20-Dec-10,20-Jun-12,20-Oct-10,20-Oct-11,Aug-12,Jun-10,Jun-11,Feb-11,Feb-12,Jun-12,Apr-11,Apr-12,20-Dec-11,20-Aug-10,20-Aug-11,10-Jun-11,10-Dec-11,10-Ju
38、n-12,10-Dec-10,10-Oct-10,10-Oct-11,10-Aug-10,10-Aug-11,10-Aug-12,10-Feb-11,10-Feb-12,10-Oct-12,10-Apr-11,10-Apr-12,(USD/t),14-Aug-09,14-Aug-10,14-Aug-11,14-May-10,14-May-11,14-May-12,14-Aug-12,14-Nov-09,14-Nov-10,14-Nov-11,14-Feb-10,14-Feb-11,14-Feb-12,(%),20-Aug-12,20-Feb-11,20-Feb-12,20-Oct-12,20-
39、Apr-11,20-Apr-12,29 October 2012Metals&MiningWhats next,Figure 9:China iron ore stockpiles,Figure 10:China iron ore imports,1009590858075706560,29%28%27%26%25%24%23%22%21%20%,706560555045403530,China iron ore imports,%Brazil,55%50%45%40%35%30%25%20%15%10%Australia,China iron ore stockpilesSource:Ste
40、elHome and Deutsche BankFigure 11:Daily HRC China800750700650600550500,%Brazilian ore,Source:Bloomberg Finance LPFigure 12:China steel inventories9.59.08.58.07.57.06.56.05.55.0,Steel inventories in main cities,2-year average,Daily HRC price ChinaSource:Bloomberg Finance LPFigure 13:US metal spread45
41、0400350300250200150,5-year average817977757371696765,Source:Bloomberg Finance LP,1978-2007 average utilization(%)US Capacity Utilization(%)US metal spread(USD/t)8-year average metal spread(USD/t)Source:Bloomberg Finance LP,Deutsche Bank Securities Inc.,Page9,29 October 2012Metals&MiningWhats nextIro
42、n ore exports,BrazilFigure 14:Iron ore exports,Iron ore export volume(000t)AsiaAsia ex-Middle EastMiddle EastChinaJapanEUGermanyFranceBelgium+LuxembourgOther regionsTotal Brazilian exports%growth,4Q1172,45567,4824,97347,80611,66316,1583,5591,8097104,96193,5754%,1Q1253,29449,0374,25735,9296,09611,087
43、2,2681,3478943,98668,368-27%,2Q1256,84752,3054,54236,9067,94815,5982,1601,2529835,79078,23514%,3Q1263,19758,0875,11141,8918,49113,8412,0442,5595765,41582,4535%,Apr-1217,77016,4291,34010,7763,1296,0436663824281,73325,546-7%,May-1219,76318,1951,56813,7962,3095,1151,0875563621,92526,8025%,Jun-1219,3141
44、7,6811,63312,3342,5114,4404073141922,13225,886-3%,Jul-1220,75518,5632,19212,9432,9454,9126596913501,58427,2515%,Aug-1220,14418,9171,22714,4272,4125,2535148202262,13627,5321%,Sep-1222,29820,6071,69214,5213,1343,6768711,04901,69527,6701%,Source:SECEX and Deutsche BankSteel imports,BrazilFigure 15:Flat
45、 steel imports,(000t)SlabsHeavy platesCoiled platesHot rolledCold rolledCoatedCanning platesHot dip galvanizedAluminum-zincPre-painted sheetSpecial-alloy steelTotalGrowth(MoM),3Q110.079.430.6125.3241.1200.020.4117.448.713.441.6718.059%,4Q110.053.631.9123.8109.9164.823.276.452.712.534.6518.6-28%,1Q12
46、0.056.919.784.2145.9197.824.388.666.318.637.5542.05%,2Q120.089.712.425.5108.4153.710.381.647.514.443.3433.0-20%,3Q120.0103.222.664.4142.2161.013.796.733.617.040.7534.123%,Apr-120.018.512.017.422.136.83.613.815.14.313.3120.1-33%,May-120.025.10.35.128.354.83.926.718.55.615.0128.57%,Jun-120.046.20.13.0
47、58.062.12.741.113.94.414.9184.443%,Jul-120.010.84.919.551.858.96.430.614.27.715.2161.2-13%,Aug-120.058.74.08.540.953.52.240.64.26.514.4180.012%,Sep-120.033.713.736.349.548.65.125.515.32.711.1193.07%,Source:SECEX and Deutsche BankFigure 16:Long steel imports,(000t)Semi-finished,longBarsRebarWire rodS
48、hapesRailsSeamless pipesSpecial-alloy,longTotalGrowth(MoM),3Q110.021.417.572.027.314.014.454.5221.2-17%,4Q110.019.547.457.425.613.731.843.0238.48%,1Q120.020.532.655.856.748.820.740.7275.816%,2Q1216.319.756.8102.351.563.319.548.5377.937%,3Q120.320.160.877.446.634.720.546.4306.9-19%,Apr-1216.04.727.43
49、0.427.918.55.813.7144.337%,May-120.37.513.525.411.730.78.318.3115.8-20%,Jun-120.07.515.946.411.914.15.416.5117.82%,Jul-120.19.213.431.319.712.78.919.6114.9-2%,Aug-120.18.315.532.19.73.87.614.291.3-21%,Sep-120.12.631.913.917.218.24.012.7100.710%,Source:SECEX and Deutsche Bank,Page10,Deutsche Bank Sec
50、urities Inc.,29 October 2012Metals&MiningWhats nextGlobal economic dataFigure 17:Global macro indicators,Apr-12 May-12,Jun-12,Jul-12 Aug-12,Sep-12,USA,YoY GPD growth(%)(1)ISMCapacity utilization(%)Housing starts(1000)Building permitsIndustrial production,automotive(2007=100),2.454.879.0747723105.8,2
