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Speaker 1: Welcome to Fear and Greed, summer investing series brought to

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Speaker 1: you by Vanta, specialists in compliance led growth. I'm Sean Elmer.

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Speaker 1: It's hard to talk about the local share market and

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Speaker 1: not talk about the big miners. BHP, Rio, Tinto and

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Speaker 1: for To, s Q Medals have long been dominant forces

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Speaker 1: in iron Ore. But of course that's all they do.

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Speaker 1: As always, this is general information only and you should

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Speaker 1: seek independent advice before making investment decisions. Sean Miike is

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Speaker 1: a senior investment analyst at Wilson Asset Management. Sean, welcome

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Speaker 1: to Fear and Greed.

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Speaker 2: Thank you, great to be here.

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Speaker 1: They haven't had the best of years the last twelve

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Speaker 1: months or so, the big miners. Is it going to

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Speaker 1: get any better?

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Speaker 2: Yeah, I mean it's a good question if you look

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Speaker 2: at sort of recapping twenty twenty four. I mean, the

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Speaker 2: materials INDAX has as a broad Indax has performed for

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Speaker 2: it's down, you know, around thirteen percent versus the your

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Speaker 2: lords which is up seventeen percent. So yeah, we think

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Speaker 2: the primary drivers really been around I guess lackluster demand

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Speaker 2: in you know, key commodity consuming markets such as China

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Speaker 2: and the emergence of you know, oversupply in some sectors

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Speaker 2: such as lithium and copper. So you know, we think

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Speaker 2: from here the outlook for commodities is heavily dependent on

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Speaker 2: your views on China, the level of I suppose policy

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Speaker 2: intervention that we're likely to see in order to try

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Speaker 2: and stimulate growth, and you know, suppose more left field

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Speaker 2: you know, the impact of tariffs under a Trump regime

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Speaker 2: and what you know he's likely to do there. So yeah,

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Speaker 2: the most recent China data has continued to be weak,

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Speaker 2: and it has demonstrated, you know, I guess, a clear

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Speaker 2: deceleration in terms of you know, retail sales, ongoing softness

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Speaker 2: in fixed asset investment, and industrial production as well, which

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Speaker 2: you know, to us really does highlight the reasons why

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Speaker 2: trying to you know, trying to get out on the

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Speaker 2: front foot of this particularly you know, I guess ahead

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Speaker 2: of any potential tariffs that are likely to come with

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Speaker 2: with Trump.

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Speaker 1: Yeah, I can. So when we talk about I mean

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Speaker 1: iron fortes Q is particularly leveraged to iron or it's

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Speaker 1: not quite a pure play, but it's closest to a

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Speaker 1: pure play. What about BHP there because obviously they dig

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Speaker 1: up a lot of iron ore, and it's a big

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Speaker 1: part of their revenue, but they've got all sorts of

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Speaker 1: other products as well.

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Speaker 2: Yeah, at this point, we'd prefer the more diversified exposures

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Speaker 2: within the mining space. I mean, iron ore is obviously

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Speaker 2: so heavily depended on you know, the level at which

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Speaker 2: we're going to see investment within China, within the within

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Speaker 2: the property market. I mean they have shown, you know,

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Speaker 2: through some of their recent i guess purported policy actions,

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Speaker 2: that housing is a big focus because at the end

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Speaker 2: of the day, you know, the Chinese consumers broader wealth

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Speaker 2: and sentiment is so dependent on how the property market's going.

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Speaker 2: So we think iron ore prices probably remain, you know,

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Speaker 2: relatively strong, but yeah, that the diversified minus is probably

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Speaker 2: where we would prefer to be at this point.

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Speaker 1: What about the commodities Copper book Sites another one that's

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Speaker 1: done incredibly well in the last few months. Rio is

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Speaker 1: very exposed to book Site. I'm just I'm trying to

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Speaker 1: get a sense of how important nine or is to

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Speaker 1: these diversified miners. Can the other commodities make up for it.

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Speaker 2: At the end of the day, Like it's iron or

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Speaker 2: that largely drives you know, the diversified miners, and you know,

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Speaker 2: even so like across the broad commodity complex, you know,

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Speaker 2: China is such a central component, we think to the

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Speaker 2: outlook for these businesses. So you know, if you bullish

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Speaker 2: on China and the policy settings that they're likely to enact,

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Speaker 2: which you know so far has been more words as

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Speaker 2: opposed to action, then you know that it's going to

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Speaker 2: be a good space to be we believe in twenty

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Speaker 2: twenty five. But you know, at this point, you know,

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Speaker 2: we're waiting to see some follow through. I think at

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Speaker 2: the moment, you're sort of in this period where you know,

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Speaker 2: you've had some initial announcements and now you've sort of

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Speaker 2: got you know, about a month or so through to

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Speaker 2: learn a new year, and then you know, China generally

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Speaker 2: goes tools down and I think we probably hear something,

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Speaker 2: you know, after that. So it feels very short term

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Speaker 2: that you know, you're not likely to see much more.

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Speaker 1: What's your take on some of the battery minerals companies.

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Speaker 1: You've talked about lithium a moment ago, Nicol's element that's

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Speaker 1: falling out of bed, but there's been rare ear things

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Speaker 1: like that. What's the outlook for some of those stocks. Again,

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Speaker 1: it's kind of a bit of breaking records China, I know,

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Speaker 1: but you know, is it all China?

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Speaker 2: Yeah, I mean we think the lithium like, the supply

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Speaker 2: demand dynamic looks like it is progressively rebalancing. We've seen

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Speaker 2: a number of significant you know shutdowns across the globe really,

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Speaker 2: so you know, from here, the demand side of the equation,

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Speaker 2: we do think for lithium is quite dependent on China,

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Speaker 2: and you know, the ev theme and whatnot, and I think,

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Speaker 2: you know, more more globally, you know, we are staying

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Speaker 2: to see the emergence of you know, the thinking around

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Speaker 2: sort of other alternatives outside of lithium, for for vehicles.

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Speaker 2: So yeah, but we're sort of cautiously optimistic that the

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Speaker 2: supply demand dynamic in lithium is is rebalancing and the

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Speaker 2: equities are probably cheap enough to dipping your toes in

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Speaker 2: a little bit.

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Speaker 1: Fantastic, Seawan, thanks for your time this morning.

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Speaker 2: Thank you.

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Speaker 1: That was Sean Wike, senior investment analyst at Wilson Asset Management.

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Speaker 1: Remember to get your own independent advice before making decisions.

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Speaker 1: This is Fear and Greed Summer Investing Series brought to

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Speaker 1: you by Vanta Vanta automates compliance for frameworks like ISO

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Speaker 1: Vanta dot com. Slash fear and greed. I'm Sean Elmer.

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Speaker 1: Enjoy your day,