Glencore will extend the life of the Mount Isa copper smelter beyond 2022. The smelter supplies around 50% of Incitec Pivot's sulphuric acid requirements at Phosphate Hill.

Morgan Stanley assesses the announcement provides certainty of supply for at least three years to 2025 and removes a potential negative for the company, otherwise Incitec Pivot would need to source sulphuric acid externally with a substantial increase in costs.

Equal-weight rating. Target is $2.25. Industry view: Cautious.

Sector: Materials.

Target price is $2.25.Current Price is $2.19. Difference: $0.06 - (brackets indicate current price is over target). If IPL meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2020 Acquisdata Pty Ltd., source FN Arena