Uranium stocks jump on the news of a suspension of the Inkai in situ recovery operation in Kazakhstan
MiFID II exempt information – see disclaimer below
Hummingbird Resources (HUM LN) 2.6p, Mkt Cap £24m – Nioko cash offer to become unconditional
Iron ore prices are down nearly 3% trading around $98/t on Chinese growth outlook concerns and increased supply.
- Daily molten steel production fell 1.2% to 2.3m this week, near 2024 lows of 2.2mt, according to Mysteel data.
- Meanwhile, shipping data from SMM showed that Rio and BHP ramped up shipments towards the end of the year.
- Deliveries from Brazil have also picked up on a recovery post rainy season disruption.
- Iron ore was one of the worst performing major commodities last year with price falling over a quarter as Chinese stimulus measures disappointed.
Uranium – stocks jump on the news of a suspension of the Inkai in situ recovery operation in Kazakhstan
- The mine owned by Kazatomprom/Cameco (60/40) JV was seeking an extension to the deadline to submit its updated Project for uranium Deposit Development documentation that was expected to be secured before YE24.
- The extension was not received with operations suspended as of January 1 to avoid potential violation of Kazakhstan legislation, Cameco reported.
- Inkai is the largest operating asset in the Group having produced 3.2kt (~7.1mlbs) in 2023 and accounting for 15% of total production (100% basis).
- Kazatomprom said that temporary suspension is not expected to affect 2025 production plans.
- The US Administration has awarded >US$1bn in contracts to Constellation (CEG N), a nuclear energy provider, to supply power to a number of government agencies including energy conservation initiatives.
Gold $2,657/oz – China Central Bank buying more gold to support finances as CNY is allowed to weaken
- Chinese policymakers have been debating allowing the yuan to weaken for some time and now appear to be actioning this policy.
EV sales: BYD sales close to overtaking Tesla as Chinese EV manufacturers continue to support strong growth in output and sales
- BYD sold 1.76m BEVs and 4.27m passenger cars last year with 514,4809 EVs sold in December including plug-in hybrids
- Tesla sold 1.77m EVs last year vs 1.81m in 2023. Delays and issues with the CyberTruck and abandonment of a cheaper $25,000 EV did not help
- Li Auto sold 500,508 vehicles in 2024 with total vehicles now sold at 1.13m EVs
- Great Wall Motor sold 135,286 vehicles in December with 321,795 new energy vehicles and 1.233m new cars sold in 2024.
| Dow Jones Industrials | -0.36% | at | 42,392 | |
| Nikkei 225 | -0.96% | at | 39,895 | |
| HK Hang Seng | +0.70% | at | 19,760 | |
| Shanghai Composite | -1.57% | at | 3,211 | |
| US 10 Year Yield (bp change) | -1.2 | at | 4.55 |
Economics
US – Weekly jobless claims 211k from previous 219k
- US construction spending saw zero growth in December vs in 0.4% November
China – The yuan fell past the 7.3 level for the first time since late 2023 while10y bond yields are trading sub 1.6% for the first time following weak manufacturing PMIs released yesterday.
- Chinese equities are reported to have extended the worst start to the year since 2016.
Fall in CNY reflects disappointing manufacturing performance PMI and increased offshoring of factories
- CNY move to 7.32/USD marks a new shift in the Yuan against the US dollar.
- The impact of a weaker Yuan should not be underestimated as it makes Chinese goods even more competitive globally.
- A weaker Yuan makes commodities more expensive for Chinese manufacturers which are already suffering from weakening margins though the net impact should be positive with low local inflation.
- China has handed out substantial fines to three financial institutions for bypassing regulatory requirements over collapsing bond yields plunge after PBoC warnings in May.
- Domestic manufacturers are reported to have been laying off staff on concerns over exports following Trump tariffs and a weaker economic environment in general.
- Stimulus is increasingly likely but we suspect it will be disguised in the form of:
- Vouchers to stimulate domestic consumption
- Lower interest rates and incentives to buy property
- Electric Vehicle subsidies
- Healthcare and increasing support for older citizens – to persuade the population to spend more of their savings
- Ensuring local authorities pay their bills to contractors. > CNY7.63bn (US$1bn) owed to contractors since March 2023.
- Removal of Hukou household registration policy which related to the settlement of rural people into urban cities
Offshoring of Chinese manufacturing is seen lifting the performance of other East Asian nations
- While China wants to export low-value manufacturing overseas, there is a growing realisation that companies are also exporting high-tech facilities abroad
- Reasons:
- Tariffs in the EU and US against Chinese manufactured goods.
- Desire to move operations outside the direct control of the authorities in China. Many still remember the reign of Chairman Mao!
- Lower costs and incentives to move manufacturing into Vietnam and other nearby regions.
China’s authorities considering limitations on exports of battery making technologies , Bloomberg cites notes for the Ministry of Commerce.
- Potential restrictions include processing methods for production of battery grade lithium chemicals as well as extraction processes like DLE.
- New export controls may follow similar restrictions imposed on rare earth metals production technologies last year.
- Earlier, China restricted exports of gallium, germanium, antimony and superhard materials to America while sales of graphite were placed under tighter controls.
- China hols a dominating grip on processing of battery related materials hosting >75% of global capacity in production of cathode materials, anode materials and battery cells, according to Bloomberg.
- We suspect the authorities who try to control overseas investments will be watching the impact of new Chinese-led EV manufacturing outside China
- Indonesia has been particularly good at onshoring value-added input by Chinese companies though it has effectively imported more pollution and production than it, perhaps, envisaged.
Approval for Yarlung Tsangpo river could generate 300bn kWh pa of power sufficient for >300m people
- The dam which could cost >CNY1tn (US$137bn) offers potential for three times the power of the Three Gorges dam would be a monumental power project requiring up to six 20km tunnels.
- Tunnelling would normally be easy but the site spans the boundary of an active tectonic plate increasing the technical challenge of construction and maintenance.
- 1.3m people may need to be resettled in Medog county in the Tibet so you can be sure of protests and Tibet and Bangladesh will also have concerns though the regulation of water flow could help Bangladesh in particular.
- China is currently building the Dalian Jinzhouwan International Airport on an artificial island at a cost of US$4.3bn with expected completion in 2035
Germany – Unemployment climbed 10k in December with the jobless rate holding at 6.1%.
- The rate has been trending higher recently amid economic headwinds.
- The economy contracted both in 2023 and 2024 with estimates for a modest 0.4% growth in 2025.
- Snap elections planned for February 23 is likely to further weigh on sentiment.
Yesterday’s manufacturing PMI data for China, the EU and UK was disappointing
- Services PMI and Composite PMI data due Monday
| Country | December | Nov |
| Australia | 47.8 | 49.4 |
| Japan | 49.6 | 49.0 |
| South Korea | 49.0 | 50.6 |
| Taiwan | 52.7 | 51.5 |
| China Official | 50.1 | 50.3 |
| China Caixin | 50.5 | 51.5 |
| Singapore | 51.1 | 51.0 |
| Indonesia | 51.2 | 49.6 |
| ASEAN | 50.7 | 50.8 |
| India | 56.4 | 56.5 |
| Russia | 50.8 | 51.3 |
| Turkey | 49.1 | 48.3 |
| Poland | 48.2 | 48.9 |
| Germany | 42.5 | 43.0 |
| France | 41.9 | 43.1 |
| EU | 45.1 | 45.2 |
| UK | 47.0 | 48.0 |
| South Africa | Fri | 58.1 |
| Mexico | 49.8 | 49.9 |
| Brazil | 50.4 | 52.3 |
| Canada | 52.2 | 52.0 |
| US ISM | Fri | 48.4 |
| US S&P | 49.4 | 49.7 |
| JP Morgan Composite | 49.6 | 50.0 |
Turkey – Inflation to 44.4% in December from 47.1% in November
- The move may make it easier for the Turkish central bank to cut interest rates from 47.5%
Syria – Israeli soldiers raid Iran-funded precision missile factory in Syria
- The factory in the Masyaf area in Syria has been manufacturing precision-guided and long-range missiles for terrorist groups including Hezbollah.
- The news highlights the extent of the preparations and planning by the Iranian regime against Israel.
- Given Russia’s former presence and involvement in Syria and connections with Iran we have to wonder if Russia was complicit in the manufacture of missiles used against Israel.
Currencies
US$1.0282/eur vs 1.0360/eur previous. Yen 157.33/$ vs 156.83/$. SAr 18.786/$ vs 18.780/$. $1.239/gbp vs $1.249/gbp. 0.621/aud vs 0.623/aud. CNY 7.315/$ vs 7.324/$.
Dollar Index 109.15 vs 108.44 previous.
Precious Metals
Gold US$2,653/oz vs US$2,637/oz previous
Gold ETFs 82.8moz vs 82.6moz previous
Platinum US$932/oz vs US$911/oz previous
Palladium US$920/oz vs US$908/oz previous
Silver US$29.6/oz vs US$29.7/oz previous
Rhodium US$4,575/oz vs US$4,575/oz previous
Base metals:
Copper US$8,808/t vs US$8,797/t previous
Aluminium US$2,517/t vs US$2,571/t previous
Nickel US$15,050/t vs US$15,876/t previous
Zinc US$2,902/t vs US$2,974/t previous
Lead US$1,926/t vs US$1,957/t previous
Tin US$28,705/t vs US$29,083/t previous
Energy:
Oil US$75.9/bbl vs US$74.9/bbl previous
Natural Gas €49.6/MWh vs €49.0/MWh previous
Uranium Futures $74.4/lb vs $72.8/lb previous
Bulk:
Iron Ore 62% Fe Spot (cfr Tianjin) US$103.6/t vs US$104.0/t
Chinese steel rebar 25mm US$487.9/t vs US$487.6/t
HCC FOB Australia US$204.0/t vs US$203.0/t
Thermal coal swap Australia FOB US$126.5/t vs US$127.0/t
Other:
Cobalt LME 3m US$24,300/t vs US$24,300/t
NdPr Rare Earth Oxide (China) US$54,407/t vs US$53,776/t
Lithium carbonate 99% (China) US$9,842/t vs US$9,933/t
China Spodumene Li2O 6%min CIF US$790/t vs US$790/t
Ferro-Manganese European Mn78% min US$1,005/t vs US$985/t
China Tungsten APT 88.5% FOB US$338/mtu vs US$338/mtu
China Graphite Flake -194 FOB US$435/t vs US$435/t
Europe Vanadium Pentoxide 98% US$4.8/lb vs US$5.0/lb
Europe Ferro-Vanadium 80% US$25.6/kg vs US$26.3/kg
China Ilmenite Concentrate TiO2 US$290/t vs US$294/t
China Rutile Concentrate 95% TiO2 US$1,087/t vs US$1,089/t
Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t
Brazil Potash CFR Granular Spot US$295.0/t vs US$295.0/t
Germanium China 99.99% US$2,725.0/kg vs US$2,725.0/kg
China Gallium 99.99% US$395.0/kg vs US$415.0/kg
Company News
| Overnight Change | Weekly Change | Overnight Change | Weekly Change | ||
| BHP | -0.5% | 0.1% | Freeport-McMoRan | -0.5% | -3.4% |
| Rio Tinto | -0.6% | 1.1% | Vale | 0.1% | -0.7% |
| Glencore | -1.3% | 0.8% | Newmont Mining | 3.1% | 0.2% |
| Anglo American | -1.3% | -1.3% | Fortescue | -2.1% | 0.1% |
| Antofagasta | -1.7% | -1.9% | Teck Resources | 1.1% | -0.7% |
Hummingbird Resources (HUM LN) 2.6p, Mkt Cap £24m – Nioko cash offer to become unconditional
- Nioko Resources is waiving remaining conditions to the cash offer following shareholders’ Rule 9 Waiver approval.
- Nioko is planning to release offer document on or before 13 January setting out the full terms of the offer to be voted on.
- Once offer presented it will be declared unconditional.
- Additionally, $30m worth of stock are to be issued to Nioko following Rule 9 Waiver approval taking its interest in the Company to 72%.
LSE Group Starmine awards for Q3 commodity forecasting:
No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Previous Metals forecasting in LSEG Quarterly Starmine Award for Reuters Polls Q3 2024
No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Quarterly Starmine Award for Reuters Polls Q3 2024
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
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
SP Angel
Prince Frederick House
35-39 Maddox Street London
W1S 2PP
*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, Rutile | Asian Metal |
DISCLAIMER
This note is a marketing communication and comprises non-independent research. This means it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination.
This note is intended only for distribution to Professional Clients and Eligible Counterparties as defined under the rules of the Financial Conduct Authority and is not directed at Retail Clients.
This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.
This note has been issued by SP Angel Corporate Finance LLP (‘SPA’) to promote its investment services. Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. The information contained herein is based on sources which we believe to be reliable, but we do not represent that it is wholly accurate or complete. All opinions and estimates included in this report are subject to change without notice. It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. SPA is not responsible for any errors or omissions or for the results obtained from the use of such information. Where the subject of the research is a client company of SPA we may have shown a draft of the research (or parts of it) to the company prior to publication to check factual accuracy, soundness of assumptions etc.
Distribution of this note does not imply distribution of future notes covering the same issuers, companies or subject matter.
Where the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.
SPA, its partners, officers and/or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).
SPA is registered in England and Wales with company number OC317049. The registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP. SPA is authorised and regulated by the UK Financial Conduct Authority and is a Member of the London Stock Exchange plc.
MiFID II – Based on our analysis we have concluded that this note may be received free of charge by any person subject to the new MiFID II rules on research unbundling pursuant to the exemptions within Article 12(3) of the MiFID II Delegated Directive and FCA COBS Rule 2.3A.19.
A full analysis is available on our website here http://www.spangel.co.uk/legal-and-regulatory-notices.html. If you have any queries, feel free to contact our Compliance Officer, Tim Jenkins (tim.jenkins@spangel.co.uk).
SPA research ratings – Based on a time horizon of 12 months: Buy = Expected return of more than 15%, Hold = Expected return between -15% and +15%, Sell = Expected return
