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Analysis of Eramet share price

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Before buying or selling Eramet shares, we recommend that you take the time to read this article, which will provide you with a lot of useful information about this company and its economic environment. With this new knowledge and a complete view of Eramet's future challenges, you will be better able to anticipate future changes in its share price. In particular, we will explain the company's detailed activities, its main competitors and its recent partnerships, and we will review its economic and financial history in detail.

Elements that can influence the price of this asset:

Analysis N°1

First of all, it is clear that the Eramet Group's activities and profitability depend to a large extent on commodity market trends, particularly the price of the metals it mines.

Analysis N°2

These activities also depend on global demand, which is closely linked to the health of the international economy, since most of Eramet's production is intended for industry. Economic cycles are therefore used to forecast the Group's results.

Analysis N°3

Government regulations in the countries in which Eramet mines are also of the utmost importance for the Group's profitability and activities and therefore for its share price performance. You should therefore take this into account before buying or selling Eramet shares.

Analysis N°4

Finally, we will of course also be watching the competition in this sector and the publications of Eramet's major rivals, as well as their results.

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General presentation of Eramet

The Eramet Group is a French company specialising in the extraction, production and sale of non-ferrous metals. However, the company is also active in the production and processing of certain alloys. To better understand Eramet's activities, they can be divided into different categories according to the share of turnover they generate, as follows:

  • Manganese production, mining and sales are Eramet's most important division, accounting for more than 52.5% of the company's total turnover. It includes various products such as oxides, sulphates and chlorides, for which Eramet is the world leader, and manganese ores and alloys, for which Eramet is the world number two. In addition to these products, Eramet also offers ancillary services in the recovery and recycling of metals from oil catalysts and electric batteries.
  • Steel alloy mining, production and sales activities account for 29.8% of the Group's total turnover. Eramet is the world's number two in the high-speed steel and closed die-forged parts for aerospace and power generation segments, but it also produces high-performance special steels and superalloys.
  • Finally, nickel mining, production and sales activities account for 17.6% of the Group's turnover. Eramet is the world leader in the ferronickel segment. It also offers high-purity nickel for superalloys and fine cobalt and tungsten powders.

Geographically, Eramet is a clearly international company that generates sales around the world. As regards the breakdown of that turnover, 10.2% of it is generated in France and 36.2% in Europe. The Asian market generates 30% of the turnover and the North American market generates 18.3%, followed by the African market with 2.5% of the turnover, the Latin American market with 2.2% of the turnover and finally the Oceania market with 0.6% of the turnover.

To carry out an effective historical technical analysis of the Eramet share price, it is essential to be able to link the major trend movements observed in the past to the events that have marked this company's current situation. To help you do this, we are now offering you a summary of the economic and financial history of this French group over the last ten years.

  • In 2008, the Eramet Group acquired 56% of Tinfos in Norway, strengthening its manganese activities by increasing manganese alloy production, mainly refined alloys, by more than 20%. In 2009, Eramet set up a partnership agreement to sell a 34% stake in Strand Minerals in Indonesia to Mitsubishi Corporation. In the same year, Eramet reached a 100% stake in Eralloys, which combines Tinfos' activities outside its power plant. Also in 2008, Eramet launched the construction of a metallurgical complex in Gabon and a titanium processing unit in France. Finally, that same year, Eramet bought the French company Valdi, which specialises in non-ferrous metal recycling.
  • 2010 will be the year of a scandal affecting Eramet after Carlo Tassara France, which holds 13% of Eramet's capital, contests the conditions of the Duval family's share exchange with SIMA and Eramet. He then asked that the exchange be cancelled. Also in 2010, Eramet joined forces with Bolloré in an agreement to explore lithium deposits. The same year, Eramet signed an agreement with STCPI to extend the SLN shareholders' agreement by 18 months. Finally, in 2010, Eramet signed an agreement with the Gabonese government to gradually increase its stake in the subsidiary Comilog.
  • In 2011, Eramet will try to improve its brand image by establishing an ethical charter and joining the Extractive Industries Transparency Initiative (EITI). That same year, the Group will open its new UKAD titanium ingot processing unit and a new powder metallurgy facility in Sweden. At the end of the year, Carlo Tassara France's cancellation of the share swap between the Duval family and Eramet was finally rejected by the court, making the Duval family the Group's largest shareholder.
  • In 2012, the Areva group, which had previously been a shareholder in Eramet, sold its stake in the company to FSI-Equation, a subsidiary of the Fonds Stratégique d'Investissement or FSI. At the end of the year, the ruling concerning the Duval family and the Tassara group was called into question and there was speculation that Eramet's capital structure would be changed. It was not until 2013 that the first commercial court ruling was finally upheld and the Duval family was finally out of the woods.
  • The following year, 2014, the Eramet Group completed the construction ofGrande Côte in Senegal through its joint venture with Australian company Mineral Deposite, called TiZiR. The plant was able to produce mineralized sands and generate revenues. Also in 2014, the Métafensch public research and industrial development platform in Uckangeen Lorraine was inaugurated by French President François Hollande. Eramet has been heavily involved in the centre.
  • In 2015, it was the Gabonese metallurgical centre in Moanda that was inaugurated, under a public-private partnership with the State of Gabon. This plant was the country's very first in the country's manganese ore processing sector.
  • In 2016, the Eramet Group sold several of its assets with the disposal of BMC, GCMC, Erachem, Eurotungstène or Sovimab.
  • Finally, in 2017, the group inaugurated the EcoTitanium aerospace recycling plant. This plant is the very first of its kind in Europe.
Analysis of Eramet share price
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The major competitors of Eramet

Although the Eramet Group ranks first or second in certain specific segments, it is in direct competition with many other large companies around the world. In order to understand the competition in this sector of activity, we now propose that you discover which are the largest mining companies in the world.

Glencore PLC 

which resulted from the 2013 merger of Glencore and Xstrata is the market leader and is a commodity trading, brokerage and mining company.

BHP Billiton

is the second in this ranking. It is a producer of iron, diamonds, uranium, coal but also oil and bauxite and one of the largest companies in this sector in the world.

Jiangxi Copper

The fourth company in this ranking is the Chinese company Jiangxi Copper, which is mainly specialized in copper.

China Shenhua Energy

In fifth place, we find another Chinese company with China Shenhua Energy, which specializes in coal but also in the operation of thermal power plants.

PLC

Anglo American PLC is the sixth largest British group in this ranking and is primarily engaged in mining production and processing in the copper, platinum and iron ore sectors.

Nippon Steel Corporation

The Japanese company Nippon Steel Corporation, a major steel producer, is ranked seventh in the world.

Yanzhou Coal Mining

A new Chinese player occupies the eighth place in the ranking. It is Yanzhou Coal Mining, which specialises primarily in coal mining.

Freeport McMoran Copper & Gold Inc

In ninth and penultimate place is the American company Freeport McMoran Copper & Gold Inc, which specializes in the production of copper and gold.

Hanwa

Finally, the last place in this ranking goes to the Japanese company Hanwa.


The major partners of Eramet

The French group Eramet owes much of its current success to the many carefully chosen partnerships and strategic alliances it has set up in the past. Indeed, thanks to targeted collaborations with companies and even governments, Eramet has been able to consolidate its position on the international market and increase the value of its shares on the stock market. Thus, it is important to know the past alliances in order to better use the future alliances for your positions. This is what we propose here with some recent examples of Eramet partnerships.

Advanced Technology & Materials

In 2017, for example, the Eramet Group set up a partnership agreement with the company AT&M or Advanced Technology & Materials. This alliance concerns the development of the activities of these two companies on the Chinese market, particularly with regard to high-speed steels. Eramet's subsidiary Erasteel is expected to sell a 10.29% stake in Heye Special Dteel to AT&M, its majority shareholder. The amount of this sale is 109.5 million yuan, or the equivalent of 15 million euros. For its part, AT&M says it will sell 51% of its stake in HEIML, another Chinese group in the field of drawing and wire drawing of high-speed steels, to Erasteel, a subsidiary of Eramet, which already holds 49% of this stake.

Tsingshan

Also in 2017, Eramet set up a partnership with the Chinese steel company Tsingshan. The latter is the world's leading producer of stainless steels and will thus help Eramet to develop Weda Bay Nickel, a company acquired by Eramet in 2006, in Indonesia. Tsinghan will expand its industrial base in Indonesia to process nickel by pyrometallurgical means. Each of these two companies will be able to market its share of production with the first sales planned for 2020 and more than 30,000 tonnes of nickel capacity. For this alliance, the Tsinghan group will take a 57% stake in the Strand Minerals Pte joint venture and Eramet will have a 43% stake.

Gabonese State

More recently, in 2018, the Eramet Group met with the Gabonese Minister of Mines. The purpose of this meeting seemed to be to discuss the strengthening of the partnership between the French mining company and this country and the various projects that would allow Gabon to develop from an economic point of view. It should be noted that Eramet has already been a partner of the Gabonese state for a long time and is only strengthening an existing alliance. This would of course allow Eramet to increase its overall production in this country and its profits, which could support its share price.

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Frequently Asked Questions

When did the Eramet Group create or acquire its various subsidiaries?

The Eramet Group is currently one of the leaders in its sector of activity, thanks in particular to the acquisition of other companies and the creation of a number of subsidiaries. Here are the details. First of all, in 1985, the Group created the subsidiary Le Nickel SLN. The same year, the subsidiary COMILOG joined the group. Then, in 1992, the Eramet Group created its subsidiary Erasteel. Finally, in 1999, the subsidiary Aubert et Duval was created.

What has been the recent performance of the Eramet share?

It is interesting to look at the past performance of the Eramet share to best determine its future trends. Thus, we note that over the last year (as of November 13, 2020), the group's share has lost 40.28%. Over two years, this decline even amounts to 59.59% and reaches 64.09% in three years. However, over the last 5 years, the performance of this share is less negative with a decline of only 1.19%.

What are the different types of analysis of the Eramet share?

If you want to invest in the Eramet share price, you will of course need to be able to use several types of analysis, including technical and fundamental analysis, but also competitive and financial analysis. The more different methods you study, the more convincing signals you will get.

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