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Speaker 1: Welcome to Fear and Greed. Bonus interview. I'm Sean Aylmer.

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Speaker 1: After a very turbulent month, it's worth a closer look

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Speaker 1: at the big miners. The outlook for BHP, Rio Tinto

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Speaker 1: and FOURTYESKEW Metals is tied by varying degrees to demand

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Speaker 1: from China and iron ore, and China has been hit

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Speaker 1: very hard by US tariffs. As always, this is general

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Speaker 1: information only. You should always seek independent advice before making

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Speaker 1: investment decisions. Sean Mike is a senior investment analyst at

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Speaker 1: Wilson Asset Management. Sean, welcome to Fear and Greed.

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Speaker 2: Thanks very much for having me.

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Speaker 1: How do you characterize the big three miners? Been a

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Speaker 1: tough period for them?

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Speaker 2: Yeah, no, it definitely has. I mean, the big minor

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Speaker 2: share prices have declined around twelve percent over the past month,

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Speaker 2: with Trump's obviously great and expected tariffs causing gyrations across

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Speaker 2: global markets. So from a relative standpoint, we've seen the

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Speaker 2: miners materially underperform the broader market. They're down about four percent,

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Speaker 2: and so, you know, clearly showing their sensitivity to global growth.

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Speaker 2: And as you mentioned, you know, I think more importantly

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Speaker 2: concerns around the demand outlook for China.

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Speaker 1: When you think the three of them, they're not they're

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Speaker 1: not actually that simile. I mean, they're all miners, but

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Speaker 1: otherwise BHP is a long way from REAR, which and

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Speaker 1: they're both a very long way from fourty s Q

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Speaker 1: Metals Group. Which of them look best place, I suppose

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Speaker 1: in terms of diversification.

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Speaker 2: Yeah, I mean BELCHP is clearly, you know, the most

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Speaker 2: diversified out of the three. But you know what you're

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Speaker 2: typically seeing these bouts of excessive volatility. You know, all

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Speaker 2: correlations tend to go to one and the stocks get

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Speaker 2: indiscriminately sold off. So you know, the big miners do

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Speaker 2: have very strong balance sheets, all three, and you know

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Speaker 2: they operate at the bottom of the costcos globally, So

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Speaker 2: I do think they're well positioned to weather the volatility.

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Speaker 2: But clearly it will be depend on sort of how

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Speaker 2: some things around policy evolve from here.

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Speaker 1: What about China? What's the outlook for China?

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Speaker 2: Yeah, I mean, I think the outlook from here is

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Speaker 2: heavily dependent on you know, obviously China and the developments

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Speaker 2: around Tariff's. Like, there's very scenarios that could play out here.

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Speaker 2: And it could have spose significant ramifications for the US

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Speaker 2: dollar and commodity demands. So I think it's clarity on

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Speaker 2: a trade deal emerges. China's likely to deploy stimulus at

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Speaker 2: some point to support the economy. And if you know,

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Speaker 2: you listen to some of the recent narrative coming out

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Speaker 2: of US Treasury Scott beston around the three legged stool,

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Speaker 2: you know, if that theory prove proves right, and it's

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Speaker 2: tariff's first, you know, tax cuts then deregulation, you could

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Speaker 2: actually see a pretty sharp rebound in US growth. So

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Speaker 2: I think it's important at the moment not to get

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Speaker 2: too negative. As silly as that sounds.

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Speaker 1: It's easy to do. Yeah, okay, so let's take them

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Speaker 1: one by one. BHP the most diversified of the lot,

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Speaker 1: though it has in recent years earned a lot of

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Speaker 1: money via iron ore, at the moment cheap relative to

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Speaker 1: recent years.

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Speaker 2: Sean, Yeah, I'd completely agree with that. I mean, in

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Speaker 2: anticipation of the taffs, you know, we have seen some

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Speaker 2: commodity prices sort of overshoot to the upside as US

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Speaker 2: buyers accumulated infantry and as the world adjusts to the

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Speaker 2: Trump task settings, we see like I suppose some near

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Speaker 2: term potential for some commodities to overshoot to the downside.

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Speaker 2: Our view is the risks there are probably greatest around

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Speaker 2: copper and aluminium. So yeah, from our perspective, you're probably

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Speaker 2: looking towards the players that have the least exposure there.

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Speaker 2: But yeah, valuations have d rate and those that are

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Speaker 2: sort of willing to look through the short term volatility,

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Speaker 2: the longer term price outlooks positive. I mean, you've got

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Speaker 2: a lack of supply growth across most major commodities, and

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Speaker 2: the demand drivers around US and European ensuring you know,

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Speaker 2: investment in infrastructure and electrification are going to remain there.

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Speaker 2: So yeah, we think you know that they do look

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Speaker 2: attractive from that standpoint.

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Speaker 1: Is there any one of the three that looks particularly

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Speaker 1: good or otherwise?

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Speaker 2: Yeah, I mean I think at the moment for US,

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Speaker 2: we'd probably lean towards be right because of the diversification story. Yeah, clearly,

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Speaker 2: the diversification and yeah, I mean the balance sheets there

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Speaker 2: is obviously very strong, and just you know where where

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Speaker 2: they're operating on the costcers globally, you know, we think they're, yeah,

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Speaker 2: they're well placed.

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Speaker 1: What about a company like Beach p there's lots of

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Speaker 1: external noise around where it's going to listen, whether it

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Speaker 1: shit have it's primary listing in Australia unlikely to get

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Speaker 1: across the line that one. But what's the prospects for

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Speaker 1: Rio given how aliant it is on iron or and

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Speaker 1: it's got some big, big expenditure coming up.

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Speaker 2: Yeah, I mean Rio, that's the I think that's the

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Speaker 2: key issue there is just what the capex profile sort

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Speaker 2: of looks like. But you know, in terms of you know,

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Speaker 2: how we're thinking about iron Or, I mean, some of

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Speaker 2: the recent indicators are the China China property market actually

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Speaker 2: showing stabilization or at least you know, very least less negative.

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Speaker 2: So you know, under the scenario where there's a trade

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Speaker 2: deal struck, that isn't you know, it's completely destructive to

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Speaker 2: Chinese and global growth, you know, and you start to

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Speaker 2: see some recovery improvement in that housing market, and you know,

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Speaker 2: clearly China I think will look to stimulate once they've

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Speaker 2: got some clarity around tariffs. You know, the iron ore

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Speaker 2: price could you know, could actually hang in there pretty well,

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Speaker 2: we think, so, Yeah, we're just sort of watching and

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Speaker 2: waiting to see how things evolve. But yeah, RHO, we think,

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Speaker 2: you know, if you can get more constructive on on

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Speaker 2: iron ore, then yeah, it's definitely you know, a decent

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Speaker 2: way to play. And obviously ford Eski has got the

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Speaker 2: most leverage from that standpoint, so you know, we'd probably

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Speaker 2: would probably opt for ford Esku over RHA.

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Speaker 1: Sean, thanks for your time. Thanks very much, Sean, Mike saying,

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Speaker 1: your investment analyst at Wilson Asset Management. Remember to get

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Speaker 1: your own independent advice before making investment decisions. This is

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Speaker 1: the Fear and Greed Bonus interview. I'm Sean An. Enjoy

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Speaker 1: your day.