SP Angel Morning View -Today’s Market View, Friday 30th May 2025

China steel sector continues to struggle, weighing on coking coal prices

MiFID II exempt information – see disclaimer below

Awale Resources (ARIC CN) – Strategic placement from Fortuna Mining

Trigon Metals (TM CN) – Completes sale of Kombat Mine to Horizon Corporation

Glencore* (GLEN LN) – Asset shift raises speculation of renewed talks with Rio Tinto

Pensana (PRE LN) – £2m equity raise

Tharisa (THS LN) – US$5m share repurchase

Tungsten West (TUN LN) – US$93m plan for the restart of production at Hemerdon

China steel sector continues to struggle, weighing on coking coal prices

• Weak Chinese steel margins continue to feed into the mining sector, with coking coal prices sliding near nine month lows.
• Analysts expect steel mills to curb production this year as the property market continues to drag on demand.
• Tariffs are expected to limit China’s steel export capacity, which has been holding up demand.
• Steel rebar prices in Shanghai have fallen to eight year lows, with iron ore prices down 10%ytd but still healthy c.$100/t.
• Copper rally has cooled slightly this morning, having hit $9,650/t.
• The yuan has held steady against the dollar following a rally in recent weeks.

Nickel / Stainless Steel – Tsingshan Holding Group Co is reported to have suspended stainless steel production on some lines in Indonesia

• Tsingshan Holding Group Co suspended some of its stainless steel production at the  Morowali Industrial Park on Sulawesi island, Indonesia (Bloomberg).
• The market for stainless steel typically works in two year cycles with overproduction leading to cutbacks every two to three years.
• There are no reports of Tsingshan cutting nickel production suggesting nickel prices might fall further as demand from stainless steel is reduced.

Copper – We’ve Never Seen This Before in the World: Video: 

Podcast: https://audioboom.com/channels/4099560-the-sharepickers-podcast-with-justin-waite

Currencies

US$1.334eur vs US$1.128/eur previous, Yen 144.03/$ vs 145.44/$, SAr 17.872/$ vs 17.923/$, US$1.348/gbp vs US$1.346/gbp, US$0.642/aud vs US$0.644/aud, CNY 7.195/$ vs 7.189/$

Dollar Index 99.50 vs 100.02.

Economics

US – One of provisions in the soon to be passed Trump tax bill is aimed at a potential increase in taxes on individuals and companies from countries whose tax policies the US deems “discriminatory”.

• Section 899 and titled “Enforcement of Remedies Against Unfair Foreign Taxes” includes provisions for higher tax rates on passive incomes such as interest and dividends.
• If passed into law such measure may further drive foreign investors away reducing demand for US assets and translating into more capital outflows.
• The measure includes raising federal income tax rate on passive US income earned by investors and institutions based in the targeted countries, first by  5pp, then increasing by another 5pp each year up to a maximum of 20pp.

Trump administration argues that tariffs are here to stay as the team promised to appeal earlier court decision to suspend the bulk of President Trump tariffs.

• Earlier, a federal appeals court paused the trade court decision to hear arguments.
• The administration hailed the appeals court decision on Thursday night calling the original ruling “so wrong and so political”.

US Treasury Secretary Scott Bessent said that trade talks with China are “a bit stalled” and may need a Trump/Xi call.

• Bessent believes more talks will take place “in the next dew weeks”.
• The last time both Trump and Xi held direct talks was in January,.

Precious Metals

Gold US$3,297/oz vs US$3,278/oz previous

Gold ETFs 88.7moz vs 88.7moz previous

Platinum US$1,073/oz vs US$1,075/oz previous

Palladium US$974/oz vs US$974/oz previous

Silver US$33.3/oz vs US$33.3/oz previous

Rhodium US$5,425/oz vs US$5,500/oz previous

Base metals:

Copper US$9,555/t vs US$9,633/t previous

Aluminium US$2,443/t vs US$2,483/t previous

Nickel US$15,257/t vs US$15,200/t previous

Zinc US$2,662/t vs US$2,719/t previous

Lead US$1,955/t vs US$1,992/t previous

Tin US$31,34/t vs US$31,651/t previous

Energy:

Oil US$63.5/bbl vs US$65.4/bbl previous

• Crude oil prices moved lower on media reports citing Kazakhstan comments that OPEC+ member countries were set to hike output in July at a meeting on Saturday, with the size of the increase still to be decided.
• The EIA estimated w/w US inventory draws of 2.8mb to crude, 2.4mb to gasoline and 0.7mb to diesel stocks, with refinery utilisation down 0.5% w/w to 92.2% and domestic production remaining flat at 13.4mb/d.
• US Henry Hub natural gas prices were flat after the EIA reported a 101bcf w/w build to 2,476bcf, with storage inventories now 11.3% below last year and 3.9% above the 5-year average.

Natural Gas €35.4/MWh vs €36.7/MWh previous

Uranium Futures $71.6/lb vs $71.6/lb previous

Bulk:   

Iron Ore 62% Fe Spot (Singapore) US$100.1/t vs US$100.8/t

Chinese steel rebar 25mm US$469.5/t vs US$469.5/t

HCC FOB Australia US$189.5/t vs US$190.0/t

Thermal coal swap Australia FOB US$103.0/t vs US$102.5/t

Other:  

Cobalt LME 3m US$33,251/t vs US$33,700/t

NdPr Rare Earth Oxide (China) US$60,086/t vs US$60,207/t

Lithium carbonate 99% (China) US$8,601/t vs US$8,768/t

China Spodumene Li2O 6%min CIF US$655/t vs US$685/t

Ferro-Manganese European Mn78% min US$995/t vs US$1,113/t

China Tungsten APT 88.5% FOB US$397/mtu vs US$388/mtu

China Graphite Flake -194 FOB US$425/t vs US$430/t

Europe Vanadium Pentoxide 98% US$5.2/lb vs US$5.2/lb

Europe Ferro-Vanadium 80% US$24.4/kg vs US$24.4/kg

China Ilmenite Concentrate TiO2 US$287/t vs US$287/t

Global Rutile Spot Concentrate 95% TiO2 US$1,465/t vs US$1,513/t

Spot CO2 Emissions EUA Price US$65.1/t vs  US$65.1/t

Brazil Potash CFR Granular Spot US$365/t vs US$357.5/t

Germanium China 99.99% US$2,825.0/kg vs US$2,825.0/kg

China Gallium 99.99% US$395.0/kg vs US$395.0/kg

Battery News

CATL successfully doubles lithium-metal battery lifespan

• Global battery leader CATL has announced that it has successfully doubled the life of lithium-metal battery (LMB) cell prototypes.
• CATL calls the breakthrough “a significant step toward commercial viability for applications like electric vehicles and electric aviation.”
• According to the company, the latest prototype had a double lifespan of 483 cycles with an energy density of 500Wh/kg.
• This is significantly higher than current solid-state batteries and around twice what current nickel manganese cobalt (NMC) batteries provide, which typically range from 200 to 300 Wh/kg.
• CATL have achieved this breakthrough by using a new liquid electrolyte that reduces the amount of ‘dead lithium’ that accumulates in the cell.
• Current cells can see as much as 71% of the electrolyte consumed by the end of the cell’s life.

Conclusion: These are big claims for energy density and lifecycles. While we are expecting significant gains to be made in Li-ion battery chemistries we would also caution that these are prototypes and the real-world performance may differ. It is interesting to note the new high-density chemistry is using a liquid electrolyte which, while normal today, is seen as less safe than new solid-state battery chemistries. We note the significant improvement in energy density should lead to substantial improvement in range and performance in vehicles. Eg you can travel further with a lighter vehicle

Company News

Awale Resources (ARIC CN) C$0.5 Mkt Cap C$43m – Strategic placement from Fortuna Mining

• Côte d’Ivoire gold explorer Awale reports a US$6m subscription from Fortuna for a 15% equity stake.
• Awale will use the funds to accelerate exploration on their 1,549km2 properties at the Odienne Project.
• The subscription represents a 19% premium to the 10 day VWAP.
• Fortuna will form a joint technical committee with Awale.
• Fortuna has three operating mines in and expects to produce 309-339koz GE in 2025, led by Séguéla in Côte d’Ivoire

Trigon Metals (TM CN) C$0.26 Mkt Cap C$14m – Completes sale of Kombat Mine to Horizon Corporation

• Trigon has completed the C$24m sale of the Kombat Mine to Horizon Corporation.
• The Company will use the funds to fund exploration at Silver Hill, Addana and the Kalahari Copperbelt.
• Trigon will achieve an additional cash payment of up to US$13m should the Kombat mine achieve ore production and processing of a daily minimum of 2,250tpd for 90 days.
• Trigon will also receive a 1% copper NSR royalty on Kombat.
• Horizon currently operates the Manica gold mine in Mozambique, bought from Xtract in 2024 having produced 18.5koz for the 9 months to September 2023

Glencore* (GLEN LN) 280p Mkt Cap £34bn – Asset shift raises speculation of renewed talks with Rio Tinto

• Glencore has reportedly moved $22bn of foreign assets into its Australian subsidiary. (AFR).
• The move saw a combination of shifting cash via internal transfers and intra-company share issuances.
• Glencore has consolidated coal mines in Canada, South Africa and Colombia alongside copper projects in Argentina, South African manganese, chrome and vanadium operations under the Glencore Investment Pty subsidiary. (Bloomberg)
• This has raised speculation that Glencore is resuming talks with Rio or increasing its attractiveness for a takeout/merger.
• This thesis is being supported by a recent Reuters article which suggested one of the reasons Rio’s CEO Stausholm stepped down was his rumoured rejection of Glencore’s merger offering.
• The AFR reports one of Stausholm’s potential successors was keen on the deal.

*An SP Angel analyst holds shares in Glencore

Pensana (PRE LN) 39p, Mkt Cap £105m – £2m equity raise

• The Company raises £2m in new equity at 35p.
• M&G is accounting for a half of the amount raised taking its stake to ~12% in the Company.
• Proceeds to be used for general working capital needs over the “next 18 months”.

Tharisa (THS LN) 68p Mkt Cap £203m – US$5m share repurchase

• PGM and Chrome producer Tharisa report the approval of a US$5m buyback, of up to 10% of the Company.
• Management notes the ‘Company’s shares are trading at a significant discount, with recent results… not reflecting the strong company fundamentals and its growth prospects.’
• Tharisa reported PGM production at 32.5koz in 1Q25 vs 29.9koz prior quarter and 35.3koz same period last year.
• Chrome concentrate at 381kt vs 374kt prior quarter and 403kt same period last year.
• Average PGM price received of US$1,421/oz and average chrome price of $235/t.
• Tharisa previously reported net cash of US$194m, NPAT of US$8.2m, and net cash from operating activities at US$36m for 1H25.
• 2025 guidance unchanged:

• • 140-160koz PGMs (6E basis) (145koz produced 2024 and 145koz produced 2023)
  • 1.65-1.8mt chrome concentrate (1.7mt produced 2024 and 1.6mt 2023)

Tungsten West (TUN LN) – 4.5p, Mkt cap £8.5m – US$93m plan for the restart of production at Hemerdon

• Tungsten West has released details of its plan for the resumption of tungsten production from the Hemerdon mine in southwest England
• Today’s announcement describes a US$93m investment generating an after-tax NPV_7.5% of US$190m and IRR of 29.3% from the production of an average of 332,000 metric tonne units (mtu) of tungsten trioxide and 462t of tin annually over an 11-year period of mining followed by an additional 4 years processing of stockpiled material.
• The plan, which uses a base case commodity price of US$400/mtu for the benchmark intermediate ammonium paratungstate (APT) price (currently ~US$400/mtu) and tin price of US$32,500/t (currently ~US$32,500/t) also envisages the production and sale of 350ktpa of aggregate products priced at £19/t through the operating life and for a further 12 years.
• The operation is expected to deliver unit costs of US144/mtu of tungsten trioxide, on an all-in-sustaining cost basis, under steady state operation processing 3.5mtpa and US$167/mtu over the full life of mine.
• Project development is underpinned by a ‘Measured & Indicated’ mineral resource of 163.7mt at an average grade of 0.34% tungsten trioxide and 0.03% tin with an additional ‘Inferred’ resource of 163.1mt at an average grade of 0.11% tungsten trioxide and 0.02% tin which may offer possible opportunities to extend the operating life.
• The overall ‘Proven & Probable’ mineral reserve is 70.7mt at an average grade of 0.15% tungsten trioxide and 0.03% tin including 36.9mt at an average grade of 0.17% tungsten trioxide and 0.03% tin within the ‘Proven’ class of reserve.

• We have previously alluded to tungsten’s status as a ‘Critical Mineral’ in jurisdictions including the EU, UK, US, Australia, and Japan and we believe that resumption of production at one of the western world’s larger deposits should be welcomed by western-world consumers in a market dominated by China.

• The company comments that “There is further scope for the extension of the current open pit towards the north and south via the Hemerdon Futures project, whereby the Company plans to extend the current operations along the already defined JORC resource, which remains open at depth and along strike in the southern direction. The Hemerdon Futures project is anticipated to extend the total operational life”.
• The company confirms that it “has already held discussions with a number of government-backed funding agencies in the UK, US and EU. In addition, the Company has opened discussions with specialist mining funders as well as with end-users and intermediaries of tungsten” to provide the required US$93m investment.
• Tungsten West says that it “expects to close the Restart Financing by the end of 2025”.
• CEO, Jeff Court, commented that “The publication of the Plan serves as reflection of our strong intent and focus to restart mining operations and tungsten production at Hemerdon … [and described the project’s global significance saying that] … At full capacity, Hemerdon is expected to produce over 20% of the global non- China supply of tungsten and will significantly strengthen the developed world’s supply chain for this critical metal”.
• Mr. Court confirmed that “the completion of the updated feasibility study … [which is] … expected in the coming months … will confirm the attractive economics and strong investment case for the Project, bolstering our position in ongoing conversations with a range of funding partners”.

Conclusion: Tungsten West’s US$93m plan for Hemerdon outlines a route to resume production of a ‘critical mineral’ at a globally significant western world tungsten deposit.  We look forward to the completion of the updated feasibility study for insights into the company’s development strategy.

LSE Group Starmine awards for 2024 commodity forecasting:

No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Precious Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

Analysts

John Meyer –John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne –Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees –Rob.Rees@spangel.co.uk – 0203 470 0535

Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471

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+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.

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