ILU - Iluka Resources

[divs4ever]

ILU @ $6.18 is down to its lowest point since early Feb 2021.....
$5.49 is abt ILU's next Support Level.....
Hmmmmmm

gets interesting but for some reasons unattractive for an investor thinking less than 5 years .. DRR is offloaded , SRX is offloaded , mining looks to be on the wane but ILU leverages construction and heavy machinery expenditure , which might be a good thing BUT has also recently added some REE interests to the established business , how far are they from generating profits

now historically ILU used to be a bouncy critter , which might be very attractive to a trader/accumulator , buy the dips and reduce in the rallies( bounces ) ... not my best technique , but one i might have some success with , as i don't need laser-sharp precision to make it work ( mid-term )

 

[finicky]

'Market Matters'

• Iluka (ILU) +0.49% continues to battle against a weak Chinese economy, with product and sales lower for the quarter, the stock trading at 52-week lows. There will be a time to buy this one again, just not yet.

 

[divs4ever]

'Market Matters'

• Iluka (ILU) +0.49% continues to battle against a weak Chinese economy, with product and sales lower for the quarter, the stock trading at 52-week lows. There will be a time to buy this one again, just not yet.

but i have a low-ball order in ... $5.xx , just in case

 

[finicky]

Didn't Dr Rorschacht mention 5.49?
I notice the last three weekly candles taken together have low forming possibilities.
The weekly momentum indicators are positively divergent to price.

The 1H24 report shows a 1/3rd drop in NPAT compared to 1H23.
If I were to extrapolate that to full year it would imply a similar drop in ROE from 17% in FY23 to 11% this year.
Book value was $5.07 FY23.
ILU closing price was $5.82.
I feel it's worth at least 2 x book value and there should be better times ahead based on its history?

i like its retained 20% of Deterra with the royalties from that.
And I like the rare earths aspect via the Eneabba project but they need government financial support for that which is not confirmed yet

Might be too early, but thinking of a speculative first buy

WEEKLY

 

[finicky]

Yeah no, just checked out the monthly chart in prep for tomorrow and not seeing anything to like yet in that time frame.
All red candles, no indecisive candle in the downleg yet, 'measured move' suggests lower possible.
I'm thinking better to sacrifice something off any possible bottom and get some longer time frame confirmation after a steep price descent like this.

For me personally it's not a time to be over eager to add exposure to the market anyway. My cash reserve has dwindled lately.

Not Held
On Watch

 

[finicky]

Experience has made me suspicious when a director resigns. He can sell his shares without notifying the market. Probably nothing to it.

"Iluka has announced the retirement of one of its long-standing non-executive directors.
Marcelo Bastos stood down from his role on August 31, after being on the Iluka board since February 2014.
Iluka chairman Rob Cole said Bastos contributed “significantly” to the company’s growth and strategic direction.
“Marcelo played a pivotal role during his tenure, supporting the achievement of milestones including the final investment decisions for the Cataby, Eneabba rare earths refinery, and Balranald projects; and the demergers of Deterra royalties and Sierra Rutile,” Cole said."

 

[rcw1]

Good morning
quarterly published today (22/10/24) see attached.

Citi analyst Paul McTaggart has been reported via New Corp Media outlets, that Iluka Resources production report was “disappointing” with revenue “well short” no update on its Eneabba refinery funding and softening price guidance.

3Q mineral sands revenue was $232m versus his $306m forecast. Zircon, rutile and synthetic rutile sales were “just” 97,000 tonnes, with 59,000 tonnes of zircon including 24,000 of lower grade zircon.
3Q realised zircon prices fell 7 per cent on-quarter and synthetic rutile fell 1 per cent. Overall unit revenue for Z/R/SR fell 4 per cent on quarter and 4Q zircon sales are expected to be impacted by seasonal weakness with prices expected to fall US$40-$50 a tonne.

Not holding

EDIT

Kind regards
rcw1

 

[qldfrog]

Good morning
quarterly published today (22/10/24) see attached.

Citi analyst Paul McTaggart has been reported via New Corp Media outlets, that Iluka Resources production report was “disappointing” with revenue “well short” no update on its Eneabba refinery funding and softening price guidance.

3Q mineral sands revenue was $232m versus his $306m forecast. Zircon, rutile and synthetic rutile sales were “just” 97,000 tonnes, with 59,000 tonnes of zircon including 24,000 of lower grade zircon.
3Q realised zircon prices fell 7 per cent on-quarter and synthetic rutile fell 1 per cent. Overall unit revenue for Z/R/SR fell 4 per cent on quarter and 4Q zircon sales are expected to be impacted by seasonal weakness with prices expected to fall US$40-$50 a tonne.

Not holding

EDIT

View attachment 186330


Kind regards
rcw1

Another tty at 5.5 i reckon..had to be a long term optimistic on this one.
Do they have anything to cut and sell or will they need a cap raising,?

 

[divs4ever]

Another tty at 5.5 i reckon..had to be a long term optimistic on this one.
Do they have anything to cut and sell or will they need a cap raising,?

hoping for Government funding for the rare earth plant/project ( maybe even discrete funding from a foreign government , say someone who hates China )

i have an order in @ sub $5.75 for extras ( but only careful nibbles )

unless you believe the global economy is actually strong , it is very hard to be short-term optimistic here

if they get desperate they can always offload that 20% stake in DRR

( i hold ILU and DRR )

 

[divs4ever]

from memory , WES tried to take over LYC a few years back , MAYBE , WES might invest some capital into the REE processing plant

( i hold WES )

 

[rcw1]

from memory , WES tried to take over LYC a few years back , MAYBE , WES might invest some capital into the REE processing plant

( i hold WES )

Good afternoon divs4ever
Yes that is very true, about WES and LYC. Good pick up. Not sure of WES’s appetite for that at present though.

Hafta have a good look at scoping of ILUs finances.

Kindcregsrds
rcw

 

[divs4ever]

Good afternoon divs4ever
Yes that is very true, about WES and LYC. Good pick up. Not sure of WES’s appetite for that at present though.

Hafta have a good look at scoping of ILUs finances.

Kindcregsrds
rcw

i would guess WES would only be interested in the processing facility , but WES has bought ( coal ) mines before .

if WES still has anything in the war-chest , i suspect they will wait for a very good deal

now SOL has some reserve cash , but they make some tough bargains maybe ILU would look elsewhere if funds are needed

( i hold SOL and BKW )

remember some battery-makers are trying out titanium on the battery anodes , that might be a silver-lining ( even if EVs only become a minor industry )

 

[finicky]

Market Matters advising on Iluka today.
Not Held

Iluka Resources (ILU) $5.98

ILU fell 3.55% on Tuesday after delivering a disappointing third-quarter result: mineral sands revenue of $232mn fell well short of expectations of ~$300 million, while sales were a 26% miss. This is down 32% in Q2, translating that year-to-date revenue is now down 10% on this period last year. Also heading in the wrong direction are Iluka’s costs, it reported a 50.4% YoY increase in unit cash production costs per tonne – not a great combination. Considering that the fourth quarter is usually weaker from a seasonal perspective, the resulting 3.55% fall in the stock on a very weak day wasn’t too bad, although the shares have more than halved from their 2023 high. As we discussed in recent weeks, ILU is a great proxy for a turnaround in the Chinese economy, especially the property market – in 2023, over 30% of ILU’s revenue was derived from China. Iluka is a leading producer of zircon, primarily used in ceramic floor and wall tiles and high-grade titanium dioxide feedstocks (rutile and synthetic rutile) used in paints, hence the obvious correlation to China’s weak property market. However, the company is looking to add another major string to its bow via the company’s development of Australia’s first fully integrated rare earth refinery at Eneabba, in Western Australia, with ILU set to become a global material supplier of separated rare earth oxides. However, at the moment, ILU is tied up in a political game with the government around the funding of this rare earths project, with no update on Eneabba refinery funding forthcoming yesterday. ILU has threatened to halt their rare earth refinery development unless the Albanese government caves in on funding. The government and ILU have been at a stalemate for about nine months over additional funding on top of a $1.25 billion limited recourse loan from Export Finance Australia issued by the Morrison government. Labour is undertaking a “robust and rigorous” assessment of the project, with next year’s election likely a factor. We believe this project will likely proceed at some point, but for now, we’re focusing on ILU’s valuation from its traditional revenue streams. China’s demand for ceramics remains subdued, and the global pigment market and European zircon demand are stable heading into the seasonally slower northern hemisphere winter. Like many companies in the ASX Materials Sector, ILU will improve with a strong economy, which is what bond markets are foreseeing into 2025, although China is the obvious wildcard. We like the risk/reward towards ILU into further weakness but the downside momentum feels entrenched short-term.

 

[divs4ever]

Market Matters advising on Iluka today.
Not Held

Iluka Resources (ILU) $5.98

ILU fell 3.55% on Tuesday after delivering a disappointing third-quarter result: mineral sands revenue of $232mn fell well short of expectations of ~$300 million, while sales were a 26% miss. This is down 32% in Q2, translating that year-to-date revenue is now down 10% on this period last year. Also heading in the wrong direction are Iluka’s costs, it reported a 50.4% YoY increase in unit cash production costs per tonne – not a great combination. Considering that the fourth quarter is usually weaker from a seasonal perspective, the resulting 3.55% fall in the stock on a very weak day wasn’t too bad, although the shares have more than halved from their 2023 high. As we discussed in recent weeks, ILU is a great proxy for a turnaround in the Chinese economy, especially the property market – in 2023, over 30% of ILU’s revenue was derived from China. Iluka is a leading producer of zircon, primarily used in ceramic floor and wall tiles and high-grade titanium dioxide feedstocks (rutile and synthetic rutile) used in paints, hence the obvious correlation to China’s weak property market. However, the company is looking to add another major string to its bow via the company’s development of Australia’s first fully integrated rare earth refinery at Eneabba, in Western Australia, with ILU set to become a global material supplier of separated rare earth oxides. However, at the moment, ILU is tied up in a political game with the government around the funding of this rare earths project, with no update on Eneabba refinery funding forthcoming yesterday. ILU has threatened to halt their rare earth refinery development unless the Albanese government caves in on funding. The government and ILU have been at a stalemate for about nine months over additional funding on top of a $1.25 billion limited recourse loan from Export Finance Australia issued by the Morrison government. Labour is undertaking a “robust and rigorous” assessment of the project, with next year’s election likely a factor. We believe this project will likely proceed at some point, but for now, we’re focusing on ILU’s valuation from its traditional revenue streams. China’s demand for ceramics remains subdued, and the global pigment market and European zircon demand are stable heading into the seasonally slower northern hemisphere winter. Like many companies in the ASX Materials Sector, ILU will improve with a strong economy, which is what bond markets are foreseeing into 2025, although China is the obvious wildcard. We like the risk/reward towards ILU into further weakness but the downside momentum feels entrenched short-term.

over the past decade of holding ILU , i have found the reports both conservative and realistic , and use the reports as a guide to the larger manufacturing economy ,

now readers used to love ILU ( and maybe still do ) but investors have to decide how best to cope with the roller-coaster ride

 

[finicky]

From Market Matters afternoon report

• Iluka (ILU) -7.89% is a leverage play on China, and disappointment about the size of China stimulus hit them hard today, a recent purchase in our Active Growth Portfolio is now back testing 52 week lows. We will give it a little more room but will cut if it doesn’t improve from here.

 

[finicky]

ILU @ 5.37
@divs4ever have you bought a few yet or did you lower your target? I'm not tempted yet. Broke local support today, gapped down and closed on its low. Tomorrow interested to see if it confirms (expecting this, fwiw)

Not Held

DAILY

 

[divs4ever]

had distractions during the first half of the day , so my top-up order got filled at the open ( but not a very large order so only mildly annoying rather than tear-inducing )

given today's drop , one might ask if $5 will hold near term ( and if i will add some more around $5 )

given the Trump election win one might have thought the future increase in US manufacturing would have buffered the ILU share price a little better

but it looks likely to be a patience tester near and medium term for ILU

 

[finicky]

Didn't confirm yesterday. Fairly strong bounce today against backdrop of a down day for materials and the ASX 200. Back up above recent support. Hard to say now, although bigger picture not greatly improved by this. I'm on the fence - was expecting it to fall.

Not Held

DAILY

 

[divs4ever]

Didn't confirm yesterday. Fairly strong bounce today against backdrop of a down day for materials and the ASX 200. Back up above recent support. Hard to say now, although bigger picture not greatly improved by this. I'm on the fence - was expecting it to fall.

Not Held

DAILY
View attachment 187857

i am expecting more pain before seeing the glimpse of light at the other end of the tunnel

i am thinking a problem trade/tariff/sanction war will force the West ( G7 ) to become more self-reliant and in the l-o-n-g-e-r term help ILU recover ( assuming it isn't taken over first .

now traders might find this an attractive playground until then )

i hold ILU

but unless i have completely overlooked a miracle strategy , there is more discomfort coming , and not just to ILU

 

[finicky]

• Iluka Rated New Buy at Ord Minnett; PT A$6.30