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China tops metals, mining IPOs in Q3'22 as offers sink to lowest since Q1'20

Chinese companies dominated global metals and mining initial public offerings in the third quarter, representing 81% of the amount offered, as escalating recession fears slowed IPO activity across all sectors.

Third-quarter metals and mining IPOs fell 48% year over year to 25, and the total amount offered dropped 52% to $542.2 million, the lowest since the onset of the pandemic in the first quarter of 2020, according to S&P Global Market Intelligence data.

The slowdown is in line with the number of global IPOs falling by more than 45% in the third quarter compared with the same period a year earlier amid a broader steep decline in equities.

"It's a really interesting time to be launching an IPO in a pretty volatile world and market at the moment," Trevor Hart, KPMG's global mining leader, told S&P Global Commodity Insights. "The markets are challenging, and those in our sector are looking at the falling pricing and value of different assets in the market as the activity shifts a little to funding merger and acquisition activity as opposed to IPO activity."

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Chinese companies represented half of the top 10 largest metals and mining IPOs made in January through September, with the planned spinoff of Tongling Nonferrous Metals Group Co. Ltd. subsidiary Anhui Tongguan Copper Foil Group Co. Ltd. leading as the top offering.

While China's third-quarter economic growth of 3.9% from a year earlier beat expectations, the lack of detail during this month's National Congress of the Chinese Communist Party about when the country's zero-COVID policy would end left analysts concerned over metals prices in 2023.

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Australia and Canada each had nine metals and mining IPOs in the third quarter for a combined value of $45.9 million, a fraction of the $359 million value of Jiangsu Longda Superalloy Co. Ltd.'s IPO on July 13 on the Shanghai exchange.

Australia is lagging the record number of metals and mining IPOs it saw in 2021 when inflation fears were just setting in.

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European metals and mining IPO activity was flat in the third quarter, following a strong second quarter that was the highest since the December quarter of 2018.

The European Commission said in July that it expected inflation to peak in the third quarter of this year.

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