Iron ore prices continue to climb despite six-month low in China steel output
MiFID II exempt information – see disclaimer below
Amarc Resources (AHR CN) – Freeport proceeds with C$75m Stage Two earn-in
Elemental Altus (ELE CN) – Merger with EMX Royalty, Tether buys $100m stake
Marimaca Copper (MARI CN) – A$80m placement to advance MOD engineering and exploration targets
Peak Rare Earths (PEK AU)– Shenghe raises cash offer
Iron ore prices continue to climb despite six-month low in China steel output
- Iron ore prices are holding stronger around $115/t, highest level since March.
- The move higher comes despite a reduction in output from China blast furnace operations.
- Mysteel reports output hit a six-month low over August 29th-September 4th as environmental curbs hit production.
- Hot metal output down 4.7%wow, capacity utilisation at its lowest level since February.
- Additionally, Tangshan mills have reportedly cut output by 30-40%.
- Iron ore consumption reportedly fell 5.2%.
Gold ($3,550/oz) holds new level after strong rally, focus shifts to NFPs
- Gold prices have hold their higher ground, although below recent peaks at $3,578/oz.
- The move followed increased concerns over Fed independence, a strong showing of support between BRIC countries over the weekend and weakening US labour data.
- JOLT data showed hiring slowing, whilst ADP data came in below expectations.
- NFPs are today’s focus, with increased anxiety over the strength of the US labour market.
- This has pushed US 10 year yields below 4.2%, their lowest level since April.
IGTV – The Future of Mining: Gold, Copper, Rare Earths & M&A: https://youtu.be/-G59iOq6x2c?si=z4fVkyHNP9isbOTB
The News Forum – The Buck Stops Here: https://www.thenewsforum.ca/series/thebuckstopshere
| Dow Jones Industrials | +0.77% | at | 45,621 | |
| Nikkei 225 | +1.03% | at | 43,019 | |
| HK Hang Seng | +1.45% | at | 25,422 | |
| Shanghai Composite | +1.24% | at | 3,813 | |
| US 10 Year Yield (bp change) | +0.6 | at | 4.17 |
Economics
US – Labour numbers are out later today that many expect to support further rate cuts post now fully priced in decision in September.
- Market estimates are for a 75k reading with inflation rising to 4.3%, the highest level since 2021.
- Private ADP survey showed US hiring slowed in August with 54k new jobs registered, down on 68k forecast.
- The report fell in line with recent data that indicated that the labour market is gradually cooling including less job openings and softer wage gains.
Department of Justice opened a criminal investigation into Fed Governor Lisa Cook.
- The case follows findings by federal housing director las month alleging Cook had “falsified bank documents and property records to acquire favourable loan terms, potentially committing mortgagee fraud”.
Japan – Authorities are raising minimum hourly wage by a record 6.3% to JPY1,121 ($7.56) that should kickstart wage-price cycle.
- The decision also supports the case for the central bank to keep hiking rates.
- New minimum rate will become effective from October.
UK – Retail sales growth revised lower for 1H25 on challenges in making seasonal adjustments to account for bank holidays.
- Updates figures suggest consumers remain wary of spending.
- Retail sales climbed 0.6%mom in July, up on 0.2% forecast.
- However, June figures were marked down to 0.3% from 0.9%.
- May figures were revised to a 1% drop from a 2.8% decline while April’s strong growth was updated for a decline
Currencies
US$1.1674/eur vs 1.1656/eur previous. Yen 148.22/$ vs 148.27/$. SAr 17.707/$ vs 17.717/$. $1.346/gbp vs $1.343/gbp. 0.654/aud vs 0.653/aud. CNY 7.138/$ vs 7.141/$.
Dollar Index 98.11 vs 98.27 previous.
Precious metals:
Gold US$3,550/oz vs US$3,540/oz previous
Gold ETFs 93.7moz vs 93.7moz previous
Platinum US$1,387/oz vs US$1,408/oz previous
Palladium US$1,133/oz vs US$1,142/oz previous
Silver US$40.8/oz vs US$40.9/oz previous
Rhodium US$7,200/oz vs US$7,300/oz previous
Base metals:
Copper US$9,959/t vs US$9,907/t previous
Aluminium US$2,603/t vs US$2,591/t previous
Nickel US$15,255/t vs US$15,180/t previous
Zinc US$2,858/t vs US$2,838/t previous
Lead US$1,990/t vs US$1,993/t previous
Tin US$34,630/t vs US$34,320/t previous
Energy:
Oil US$66.8/bbl vs US$66.9/bbl previous
- Crude oil prices have been under pressure this week ahead of Sunday’s meeting of the eight Opec+ members to decide the next steps after completing an accelerated unwinding of 2.2mb/d of voluntary production cuts over the Summer.
- The EIA estimated w/w US inventory builds of 2.4mb to crude and 1.7mb to distillates, offset by a 3.8mb draw to gasoline stocks, as refinery utilisation fell 0.3% to 94.3% on domestic output of 13.4mb/d.
- US Henry Hub natural gas prices stabilised above $3/mmBtu this week as the EIA reported a 55bcf w/w build to 3,272bcf (+55bcf exp), which is above the seasonal average. Storage inventories were 2.2% below last year and 5.6% above the 5-year average despite LNG exports rising to an record high in August as key plants finished maintenance programmes.
Natural Gas €32.6/MWh vs €31.9/MWh previous
Uranium Futures $76.4/lb vs $76.4/lb previous
Bulk:
Iron Ore 62% Fe Spot (cfr Dalian) US$116.8/t vs US$115.1/t
Chinese steel rebar 25mm US$455.3/t vs US$457.0/t
HCC FOB Australia US$185.0/t vs US$185.0/t
Thermal coal swap Australia FOB US$109.0/t vs US$109.0/t
Other:
Cobalt LME 3m US$33,335/t vs US$33,335/t
NdPr Rare Earth Oxide (China) US$83,570/t vs US$84,022/t
Lithium carbonate 99% (China) US$10,227/t vs US$10,223/t
China Spodumene Li2O 6%min CIF US$860/t vs US$860/t
Ferro-Manganese European Mn78% min US$1,015/t vs US$1,015/t
China Tungsten APT 88.5% FOB US$528/mtu vs US$528/mtu
China Graphite Flake -194 FOB US$410/t vs US$410/t
Europe Vanadium Pentoxide 98% US$5.4/lb vs US$5.4/lb
Europe Ferro-Vanadium 80% US$23.7/kg vs US$23.7/kg
China Ilmenite Concentrate TiO2 US$270/t vs US$270/t
China Rutile Concentrate 95% TiO2 US$1,100/t vs US$1,099/t
Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t
Brazil Potash CFR Granular Spot US$350.0/t vs US$350.0/t
Germanium China 99.99% US$3,075.0/kg vs US$3,075.0/kg
China Gallium 99.99% US$395.0/kg vs US$395.0/kg
EV & battery news
Trump reduces auto tariffs on Japanese vehicles
- President Trump has signed an executive order reducing auto tariffs on Japanese vehicles from 27.5% to 15%, which will take effect next week.
- Despite the cut, the 15% rate remains six times higher than the pre-April level and will continue to weigh heavily on the smaller Japanese automakers like Mitsubishi, Mazda, and Subaru.
- Mitsubishi, which lacks North American production, has been hit hardest and has seen prices increase by an average of $2,403 per vehicle.
- Mazda has shifted production to Alabama, reduced exports from Mexico, and may strengthen its partnership with Toyota to absorb cost pressure.
- Subaru has removed base models from its lineup and raised prices to cope with rising costs.
| Overnight Change | Weekly Change | Overnight Change | Weekly Change | ||
| BHP | -0.9% | -3.7% | Freeport-McMoRan | -0.3% | 5.0% |
| Rio Tinto | 0.9% | 1.5% | Vale | 0.5% | 0.1% |
| Glencore | 0.8% | -1.6% | Newmont Mining | -0.7% | 3.4% |
| Anglo American | 0.9% | 0.1% | Fortescue | 1.1% | -2.2% |
| Antofagasta | 0.5% | 0.6% | Teck Resources | -2.8% | -0.3% |
Company news
Amarc Resources (AHR CN) C$0.85, Mkt Cap C$191m – Freeport proceeds with C$75m Stage Two earn-in at Joy
- Canadian copper-gold explorer Amarc announced yesterday that Freeport will advance with Stage Two of the earn-in.
- Freeport has now completed the C$35m stage one exploration spend on Joy.
- Freeport now holds 60% of the JV and Stage Two will earn an additional 10%.
- The AuRORA deposit currently being targeted is a copper-gold-silver.
- Initial results included 82m at 1.08% CuEq from 18m.
- The Company expects continuity along strike and at depth.
Elemental Altus (ELE CN) C$2.05, Mkt Cap C$506m – Merger with EMX Royalty, Tether buys $100m shares
- Royalty and streaming company Elemental Altus will acquire all outstanding common shares of EMX.
- Concurrently, Tether will purchase 75m Elemental Altus shares at C$1.84/share for US$100m.
- The pro-forma entity will have 16 producing royalties generating US$80m in revenue next year.
- The portfolio will be split 67% precious metals and 33% base metals.
- The subscription from Tether will provide ‘the ability to pursue further valuable growth through acquisitions.’
- EMX shareholders to receive a 21.5% premium to 20 day VWAP.
- EMX brings Tether the long-life Timok royalty, triples their ownership of the Caserones royalty and adds assets in North America, South America and Europe.
Marimaca Copper (MARI CN) C$10.1, Mkt Cap C$1.1bn – A$80m placement to advance MOD engineering and exploration targets
- Marimaca announces it is raising A$80m at A$9.55/share.
- Net proceeds will be used to progress the Marimaca Oxide Deposit to FID, exploration at Pampa Medina and the Marimaca sulphide target.
- Management notes ‘strong support from high-quality investors.’
- Marimaca released the MOD DFS which outlined an open pit, heap leach and SX-EW operation.
- DFS highlights:
- 14mtpa ore stacked at 0.42% Cu
- 72% recoveries for 43ktpa LOM average Cu.
- LOM strip ratio of 0.82:1
- Economics:
- $587m development CAPEX and $529m LOM SUSEX
- LOM AISC of $2.29/lb and C1 costs of $1.84/lb.
- Post-tax NPV8 of $709m at $4.3/lb.
- IRR of 31%.
- AT NPV8 of $1.1bn at $5.05/lb Cu for 39% IRR and $347m at $3.5/lb for IRR of 21%.
- Going forward, Marimaca is focused on grade control, further metallurgical optimisation work, early site preparation and growth at Pampa Medina.
- Permitting:
- Company expects one further follow-up round of questions and information requests, with environmental approvals expected end of 2026.
- Funding:
- Marimaca held $24m in cash in June, and has begun the debt financing process for the MOD project.
- Company notes expressions of interest up to $500m.
- Debt financing package expected in 2025.
Peak Rare Earths (PEK AU) A$0.42, Mkt Cap A$181m – Shenghe raises cash offer
- Shenghe Resources agreed to increase its cash offer price to A$195m for 100% in the Company.
- New offer amounts to A$0.443 per share.
- The revision implies a 23% increase over A$158m offered in May.
- Shenghe confirmed that the offer is its best and final proposal.
- The Board recommended the offer.
LSE Group Starmine awards for 2025 / 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 for Q1 2025
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
George Krokos – george.krokos@spangel.co.uk – 0203 470 0486
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*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 |
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