SP Angel Morning View -Today’s Market View, Friday 19th May 2023

Lithium carbonate and rare earth prices rise despite poor China data

MiFID II exempt information – see disclaimer below

Europa Metals Limited (EUZ LN) – Drilling results at Toral Project

Syrah Resources (SYR AU) – AGM presentation highlights 3-5-fold increase in natural graphite and AAM demand over next 10 years

Nickel prices slide as supply ramps up and stainless-steel demand wanes

  • LME nickel prices have weakened below $22,000/t, falling close to 30% since the beginning of the month.
  • Indonesia is ramping up supply rapidly, with CICC expecting the country to boost capacity to 1.2mt between 2021-2025, removing deficit concerns.
  • Indonesia’s supply of Mixed Hydroxide Precipitate (MHP) used for lithium-ion batteries is expected rise four times to 600kt between 2022 and 2027. (CRU)
  • Indonesia’s supply of nickel pig iron is expected to rise from 114kt in 2022 to 201.8kt in 2025. (SMM)
  • In the short term, sliding steel demand and reduced Chinese EV output is weighing on prices as output continues to rise.

Gold – $1,965/oz – Prices fall again as dollar rallies and debt ceiling concerns ease

  • Gold prices are on track to fall 2.2% this week, their weakest weekly close since February.
  • The move follows a repricing of the dollar against a basket of currencies alongside US Treasury yields.
  • The 10-year yield climbed to February highs of 3.66%, with higher yields weighing on non-interest-bearing bullion.
  • The odds of a June 25 bp hike rose to 40% as the market rallied on expectations of a debt-ceiling resolution and rising liquidity from the US government.
  • The Dollar is holding around two-month highs, weighing on gold prices.
  • Fed chair Logan noted that “We haven’t yet made the progress we need to make. And it’s a long way from here to 2% inflation,” supporting bets on a 25bp hike in June.

Base metals hold lower after week of declining prices on downbeat China manufacturing

  • Copper prices held around the $8,250/t having touched $8,150/t yesterday.
  • The move marks the metal’s longest streak of weekly declines in 12 months.
  • Copper has now fallen 15% from January highs.
  • Zinc and lead are also set for weekly losses.
Dow Jones Industrials +0.34% at 33,535
Nikkei 225 +0.77% at 30,808
HK Hang Seng -1.53% at 19,417
Shanghai Composite -0.42% at 3,283


Australian government to support critical mineral projects with $50m in grants

  • The Australian government has committed $50m in grants to support the domestic downstream processing of critical minerals.
  • The move forms part of the Government’s strategy to ‘realise its ambitions to be a clean-energy superpower.’
  • Projects seeing support include Magnium Australia, which is developing technologies for clean extraction of magnesium.
  • Northern Minerals, which holds the Browns Range heavy rare earths project, is also seeing grant funding.
  • 13 projects across three states will receive funding.

Japan – April CPI climbs to 3.5% yoy vs 3.2% in March, Core CPI climbs to 3.4% yoy vs 3.1% in March (42 year highs)

Germany – DAX index looks set to close at a record high as concerns over the US debt ceiling recede

  • The index is being led higher by Rheinmetall, the defense contractor and Siemens Energy which makes electric motors, grid components and turbines etc…

Chile –  Lower house of Congress voted for a new mining tax reform bill to increase royalties and taxes with the president certain to sign off on the move.

  • Codelco, which funds Chile’s military through a direct 20% royalty is struggling to maintain copper production at 1.35mtpa, down 20% in six years.


US$1.0781/eur vs 1.0823/eur yesterday. Yen 138.16/$ vs 137.63/$. SAr 19.335/$ vs 19.403/$. $1.241/gbp vs $1.246/gbp. 0.664/aud vs 0.664/aud. CNY 7.035/$ vs 7.022/$.

Dollar Index 103.39 vs 102.97 yesterday.

Commodity News

Precious metals:

Gold US$1,968/oz vs US$1,977/oz yesterday

Gold ETFs 93.9moz vs US$94.0moz yesterday

Platinum US$1,065/oz vs US$1,069/oz yesterday

Palladium US$1,476/oz vs US$1,476/oz yesterday

Silver US$23.87/oz vs US$23.56/oz yesterday

Rhodium US$7,000/oz vs US$7,000/oz yesterday

 Base metals:   

Copper US$ 8,220/t vs US$8,257/t yesterday

Aluminium US$ 2,299/t vs US$2,293/t yesterday

Nickel US$ 21,290/t vs US$21,180/t yesterday

Zinc US$ 2,491/t vs US$2,509/t yesterday

Lead US$ 2,072/t vs US$2,048/t yesterday

Tin US$ 24,802/t vs US$25,020/t yesterday


Oil US$76.5/bbl vs US$76.7/bbl yesterday

Natural Gas US$2.589/mmbtu vs US$2.368/mmbtu yesterday

Uranium UXC US$53.40/lb vs US$53.40/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$107.3/t vs US$105.1/t

Chinese steel rebar 25mm US$541.4/t vs US$537.8/t

Thermal coal (1st year forward cif ARA) US$108.3/t vs US$108.3/t

Thermal coal swap Australia FOB US$164.0/t vs US$163.0/t

Coking coal swap Australia FOB US$224.0/t vs US$224.0/t


Cobalt LME 3m US$34,930/t vs US$34,930/t

NdPr Rare Earth Oxide (China) US$66,791/t vs US$66,061/t

Lithium carbonate 99% (China) US$33,111/t vs US$31,352/t

China Spodumene Li2O 6%min CIF US$3,990/t vs US$3,990/t

Ferro-Manganese European Mn78% min US$1,315/t vs US$1,315/t

China Tungsten APT 88.5% FOB US$325/mtu vs US$325/mtu

China Graphite Flake -194 FOB US$775/t vs US$775/t

Europe Vanadium Pentoxide 98% 7.5/lb vs US$7.5/lb

Europe Ferro-Vanadium 80% 32.25/kg vs US$32.25/kg

China Ilmenite Concentrate TiO2 US$327/t vs US$328/t

Spot CO2 Emissions EUA Price US$94.0/t vs US$94.0/t

Brazil Potash CFR Granular Spot US$380.0/t vs US$380.0/t

Battery News

Europe to see more EV battery swap stations as NIO and Shell collaboration opens first site

  • NIO and Shell signed a strategic partnership agreement in November 2021 to collaborate on charging and battery swap facilities in China and Europe.
  • The first site from the joint venture was opened in Harmelen, Netherlands.
  • NIO has 16 battery swap stations and eight charging stations across Europe.
  • The swap station that can replace the power pack, in a NIO EV, in under five minutes could be seen in the UK, alongside NIO EVs as early as 2024 as the Chinese manufacturer looks to expand its reach globally.
  • Battery swaps have proved successful in China with NIO operating over 1300 sites, reaching 2300 by the end of 2023 – NIO users have also completed over 20m battery swap.
  • Swapping could help ease the strain on power grids with batteries being charged slowly during off-peak times.
  • It would, however, require more standardisation of EV batteries if it were to be a viable option for widescale use.
  • NIOs third generation swap station stores 21 battery packs, another potential barrier to mass adoption.

Company News

Europa Metals Limited (EUZ LN) 3p, Mkt Cap £2.9m – Drilling results at Toral Project

  • Europa Metals reports drill results from its Toral Pb,Zn & Ag project in north-western Spain.
  • The assay results are the first from their 2023 drilling programme alongside Denarius Metals Corp.
  • Highlights include:
    • TOD-043 of 8.7m @ 1.66% Zn, 9.43% Pb, 44.3ppm Ag, (11% ZnEq(PbAg)) from 472m.
  • This hole intersected mineralisation adjacent to an existing high-grade intersect included in the Indicated Resource Block.
  • Europa’s programme is targeting 11 holes over 7,000m using infill drilling within the indicated resource alongside step-out drilling.
  • Europa’s resource currently stands at 7Mt @ 8.1% ZnEq, 5% Zn, 3.7%Pb and 29g/t Ag.
  • The Company hopes to update the MRE later following the completion of the programme.
  • Europa have sent assays for hole TOD-044 to the labs and are currently drilling holes TOD-045 and TOD-046 to depths of 610m and 810m respectively.

Syrah Resources (SYR AU) A$0.98, Mkt cap A$659m – AGM presentation highlights 3-5 fold increase in natural graphite and AAM demand over next 10 years

  • Syrah Resources has delivered a powerful and captivating presentation on the importance of natural graphite and AAM ‘Active Anode Material’ in its AGM presentation.
  • While Lithium and cobalt has caught the headlines graphite has been largely ignored, partly due to the presence of synthetic graphite from oil refineries which is expensive at ~$6,000/t but is consistent and available.
  • Natural graphite by comparison is much cheaper to produce but more variable in its composition which is confusing for the uninitiated.
  • Fortunately, companies like Syrah, Talga+, Renascor+, Nextsource, GreenRoc* are working on the supply of natural graphite and Active Anode Material in consistent form for Li-ion battery factories.
  • So far Syrah is the only vertically integrated natural graphite producer outside of China, though others are catching up fast.
  • Syrah mines its graphite from Balma in the north of Mozambique and is building a 11,250tpa 18-micron natural graphite AMM facility in the US to feed new Li-ion battery production. Capex is US$176m.
  • This facility should further expand to around 45,000tpa of 12-18 micron natural graphite AMM in 2026 .
  • Critical to this is the Vidalia Qualification facility for verification of the quality of the AMM being produced..
  • Syrah estimate operating costs at $3.02/kg of natural graphite for the 45,000tpa facility indicating a good margin assuming prices of $5.00-7.00/kg in China though we suspect US prices might be higher.
  • Better still the carbon footprint of Syra’s natural graphite AMM is less than a third that of Chinese Synthetic graphite AMM at 7.3kg CO” eq/kg of AMM.
  • Chinese battery anode production has been volatile with anode producers cutting back in February in China in February, July and October last year.
  • Last year Tesla exercised its option to offtake an additional 17ktpa AAM from Syrah’s Vidalia plant at a fixed price and for an initial term of no less than four years, subject to the expansion of Vidalia’s production capacity to 45ktpa AAM.

Conclusion:  It is clear the development and ongoing expansion of >300 Gigafactories around the world will require much more battery anode and separator materials alongside lithium, nickel, manganese and cobalt. While China is producing more LFP, Lithium Fe Phosphate batteries the West is sticking to higher capacity NMC chemistry. Both require significant expansion in the production of AAM graphite material.

No.1 in Copper:  “The winner of the 2020 Fastmarkets Apex contest for copper was the team at SP Angel comprising John Meyer, Sergey Raevskiy and Simon Beardsmore, with an accuracy score of 93.8%”

No1. In Gold:  “SP Angel’s trio took the top spot for the gold price prediction throughout the year, with an accuracy score of 97.59%”

The SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020


John Meyer – [email protected] – 0203 470 0490

Simon Beardsmore – [email protected] – 0203 470 0484

Sergey Raevskiy –[email protected] – 0203 470 0474


Richard Parlons –[email protected] – 0203 470 0472

Abigail Wayne – [email protected] – 0203 470 0534

Rob Rees – [email protected] – 0203 470 0535

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

SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London


*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)

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

Sources of commodity prices  
Gold, Platinum, Palladium, Silver BGNL (Bloomberg Generic Composite rate, London)
Gold ETFs, Steel Bloomberg
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt LME
Oil Brent ICE
Natural Gas, Uranium, Iron Ore NYMEX
Thermal Coal Bloomberg OTC Composite
Coking Coal SSY
RRE Steelhome

Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite Asian Metal


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