SP Angel Morning View -Today’s Market View, Thursday 3rd July 2025

Copper breaches $10,000/t on tariff expectations and Rumours of Chinese smelters short positions

MiFID II exempt information – see disclaimer below

Glencore* (GLEN LN) – $1bn buyback following Viterra spin-out, Australian copper smelters face closure

Mkango Resources* (MKA LN) – BUY – SPAC merger update

New Frontier Minerals (NFM LN) – Positive bulk test results from stockpiles at Queensland copper project

Rockfire Resources (ROCK LN) – £2m placing to progress the Molaoi zinc project in Greece

WIA Gold* (WIA AU) – Additional high-grade drilling results in Namibia

Copper ($9,995/t) – breaches $10,000/t on tariff expectations and Rumours of Chinese smelters short positions

• Copper on LME breached the $10,000/t mark as buyers continue to position for Trump’s Section 232 announcement.
• Chinese Smelters and traders are rumoured to be short on copper, with the potential to see prices spiking higher if the smelters are unable to deliver metal into the market.
• Rumours are for 30,000-50,000t of copper to be delivered into the LME in HK and other Asian locations.
• The market continues to await the US Section 232 investigation which is currently guided for November and may also result in a ban on copper scrap exports to China
• Traders report producer selling for July and a dip in consumer buying at current levels with consumer buying for October delivery.
• The rally is also being driven by higher COMEX prices, with the US contract sitting at $5.18/lb today.
• This reflects a $1,400/t premium to the more widely traded LME contracts.
• The continued move of copper cathode to the US has pushed CME stocks higher and diminished LME inventory levels, subsequently pushing LME futures into backwardation, supporting prices.
• There are some concerns over falling demand for copper in China, though these may be seasonal variations with maintenance and factory holidays
  • Utilisation rates at Chinese primary copper rod producers fell 1.8% to 74% last week,
  • Utilisation rates at wire makers’ also fell 3% to 70%
• Meanwhile, aluminium, which is suffering from weak European and Asian demand, is up 3%ytd.
• Nickel is flat as Indonesia ramps up output and Chinese battery chemistry moves away from the metal.
• Lead has rallied 6%yd on supportive seasonal demand whilst zinc is weak on stronger mine production from China.

Iron ore and metallurgical coal prices move higher as China

• Iron ore and met coal prices have moved higher yesterday, following some structural changes from Beijing.
• China is looking to crack down on low-price competition and phase out outdated industrial capacity amid deflationary pressures.
• Met coal equities rallied across the US and ASX exchanges, whilst HCC prices rose to $180/t in Australia.
• Iron ore prices jumped above $102/t in China.
• Additionally, Vale announced plans yesterday to low forecasts for iron ore agglomerates production in 2025 amid weak pellet markets and reduced demand for high-quality products.
• High-premium iron ore markets have been under pressure this year on weak Chinese blast furnace margins. Beijing’s plans may alter this course.
• WoodMac report that ‘producers are increasingly cautious, with some diverting to fines sales’ as mills favour lower-grade ores.
• Vale suspended output from their San Luis pelletising plant this quarter.
• Analysts expect Vale’s guidance to cut seaborne pellet supply by c.6% globally.

Trade IG: Trading Experiences with Angeline Ong: Talk starts 2:16 into the video: 

Economics

US – Markets await Non-Farm Payrolls later today

US / Vietnam Trade deal agreed on minimum 20% tariff including vehicles

• Transhipping will attract a 40% Tariff on goods passing through Vietnam, presumably without significant added value in the country.
• The devil is always in the detail, and it will be interesting to see what the cutoff is between transhipping and sufficient added value.
• The Vietnamese may be quietly please about this as they would struggle to gain from the simple relabelling of goods from China.
• The trade deal averts the threatened 46% tariff.
• In return Vietnam gets preferential market access for US goods, including large-engine cars.
• The 20% tariff is unlikely to make a significant difference as costs are very much lower in Vietnam than the US.
• Vietnamese workers are known for their precise manual dexterity, making them particularly well suited for certain types of work, something we do not associate with your average American.
• We expect a number of influential Chinese companies to be furious at America’s move to block their China tariff avoidance and for their lobbying within Chiana to reignite trade tensions.
• Trump appears determined to block a many indirect routes into the US as possible as we expect the US to apply similar tariff regimes to block indirect Chinese trade.
• It is possible the US could simply apply 40% of the quantum of Chinese content in all goods from Vietnam, though this might be complex to apply.

Currencies

US$1.1805/eur vs 1.1777/eur previous. Yen 143.82/$ vs 143.86/$. SAr 17.516/$ vs 17.687/$. $1.366/gbp vs $1.371/gbp. 0.658/aud vs         0.657/aud. CNY 7.162/$ vs 7.167/$.

Dollar Index 96.72 vs 96.88 previous.

Precious metals:

Gold US$3,355/oz vs US$3,330/oz previous

Gold ETFs 90.5moz vs 90.5moz previous

Platinum US$1,416/oz vs US$1,358/oz previous

Palladium US$1,155/oz vs US$1,114/oz previous

Silver US$36.9/oz vs US$36.0/oz previous

Rhodium US$5,500/oz vs US$5,475/oz previous

Base metals:   

Copper US$10,001/t vs US$9,933/t previous

Aluminium US$2,603/t vs US$2,595/t previous

Nickel US$15,360/t vs US$15,260/t previous

Zinc US$2,746/t vs US$2,709/t previous

Lead US$2,070/t vs US$2,044/t previous

Tin US$33,645/t vs US$33,565/t previous

Energy:

Oil US$68.4/bbl vs US$67.2/bbl previous

• Crude oil prices rose despite the EIA estimating w/w US inventory builds of 3.8mb to crude and 4.2mb to gasoline stocks, offset by a 1.7mb draw to diesel as refinery utilisation rose 0.2% w/w to 94.9%.
• European energy prices edged lower as EU natural gas storage levels rose 2.3% w/w to 59.2% full (vs 68.5% 5-Yr average) with aggregate inventory at 671TWh and Germany now above 50% full.
• The European Commission has proposed an amendment to the EU Climate Law, setting a 2040 EU climate target of 90% reduction in net greenhouse gas (GHG) emissions, compared to 1990 levels. This builds on the EU’s existing legally binding goal of reducing net GHG emissions by at least 55% by 2030.

Natural Gas €33.6/MWh vs €34.3/MWh previous

Uranium Futures $77.6/lb vs $77.7/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Dalian) US$101.6/t vs US$99.8/t

Chinese steel rebar 25mm US$459.0/t vs US$458.4/t

HCC FOB Australia US$179.3/t vs US$175.0/t

Thermal coal swap Australia FOB US$114.0/t vs US$113.3/t

Other:  

Cobalt LME 3m US$33,335/t vs US$33,335/t

NdPr Rare Earth Oxide (China) US$62,064/t vs US$62,020/t

Lithium carbonate 99% (China) US$8,657/t vs US$8,511/t

China Spodumene Li2O 6%min CIF US$640/t vs US$630/t

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

China Tungsten APT 88.5% FOB US$428/mtu vs US$428/mtu

China Graphite Flake -194 FOB US$410/t vs US$410/t

Europe Vanadium Pentoxide 98% US$5.0/lb vs US$5.0/lb

Europe Ferro-Vanadium 80% US$23.8/kg vs US$24.3/kg

China Ilmenite Concentrate TiO2 US$290/t vs US$290/t

China Rutile Concentrate 95% TiO2 US$1,096/t vs US$1,095/t

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

Brazil Potash CFR Granular Spot US$362.5/t vs US$362.5/t

Germanium China 99.99% US$2,925.0/kg vs US$2,925.0/kg

China Gallium 99.99% US$400.0/kg vs US$400.0/kg

EV and battery news

China NEV wholesale up 29% yoy in June to 1.26m

• The China Passenger Car Association (CPCA) estimates China’s wholesale NEV sales are to be 1.26m, up 29% yoy and 3% mom.
• In H1 2025, China’s NEV wholesale sales are estimated to have reached 6.47m units, a yoy increase of 38%.
• Sales continue to be driven by the governments trade-in incentives.

CATL breaks ground at JV battery plant in Indonesia

• CATL has begun construction on a $6bn battery manufacturing plant in Indonesia, according to a report by Bloomberg yesterday.
• The JV is between CATL, Indonesia’s state-owned battery company Indonesia Battery Corp, and PT Aneka Tambang.
• The factory is expected to have a total battery capacity of 15GWh, capable of powering 250,000 to 300,000 vehicles, said Indonesian Energy and Mineral Resources Minister.
• The JV also plans to produce battery energy storage systems for solar panels, according to the report.

BYD puts Mexico plant plans on hold citing geopolitical tensions

• BYD has suspended plans to build a major production plant in Mexico, due to geopolitical tensions and uncertainties stemming from Trump’s trade policies.
• BYD remains interested in expanding in the Americas, but there is no timeline to make a new investment, a senior executive said.

Company News

Glencore* (GLEN LN) 307p, Mkt Cap £37bn – $1bn buyback following Viterra spin-out, Australian copper smelters face closure

• Glencore yesterday announced the closing of the Viterra/Bunge merger.
• Glencore received 16.4% of the enlarged company and c.$900m in cash for a combined consideration of c.$2.6bn.
• The Company will use the proceeds to commence a $1bn buyback starting next week and due for completion in February 2026.
• Elsewhere, the Australian reports Glencore is considering shuttering its Australian copper smelting operations.
• The Company has suggested that operations are suffering from China’s smelting roll-out and elevated energy and labour costs in country.
• Glencore is seeking Australian government support for its Mount Isa and Townsville operations.
• The Australian reports Glencore is losing A$30m per month and will not continue operating without government support.
• Rio Tinto recently raised similar concerns over its Tomago aluminium smelter and Trafigura’s zinc and lead smelters are also struggling.

*An SP Angel Analyst holds shares in Glencore

Mkango Resources* (MKA LN) 25p, Mkt Cap £60m – SPAC merger update

BUY

• The Company signed a definitive business combination agreement with Crown PropTech Acquisitions for its upstream and midstream business segments.
• The agreement will see both Songwe Hill Rare Earh Project and Pulawy Separation Plant put into a separate entity via a SPAC merger that will be listed on NASDAQ.
• Mkango Rare Earths Limited or MKAR Group will be the new entity.
• Mkango Resource will remain major shareholder in MKAR Group owning 40m shares, under initial assumptions.
• Under the business combination agreement valuation, Mkango Resources’ stake in the MKAR Group is estimated at $400m using $10/sh price.
• Net proceeds from the merger are expected to support MKAR strategic growth plan including development of Songwe Hilland Pulawy.
• Crown PropTech Acquisitions or CPTK initial shareholders expected to hold 6.9m shares in MKAR.
• Additionally, ~$750k worth of convertible notes may be converted into new shares for CPTK shareholders.
• CPTK warrants that include 9.2m public warrants and 5.0m private warrants will become exercisable (@ US$11.5, 5y term) on the closing of the SPAC merger.
• The merger is expected to be completed 4Q25.
• The deal is subject to, among other things, the approval by Nasdaq and STX-V as well as shareholders of Mkango and CPTK.
• Mkango can walk away if net cash held by CPTK is less than US$5m.
• The deal does not include the recycling part of the business that is currently being commercialised in the UK, the US and the EU.

Conclusion: The company draws closer to completing the SPAC merger and list its upstream and midstream business on Nasdaq. New funds will be used to move both Songwe Hill and Pulawy closer to FID and funding with the Company maintaining significant exposure to both. The merger is expected to close in 4Q25 and recycling segment is not part of the transaction.

*SP Angel acts as Nomad and Broker for Mkango

New Frontier Minerals (NFM LN) 0.5p, Mkt Cap £8.0m – Positive bulk test results from stockpiles at Queensland copper project

• New Frontier Minerals has released test results from 12 samples “totalling approximately 200 kg” recovered from three former mine stockpiles at its ‘Big One’ copper project in north-west Queensland.
• The bulk samples grading between 3.9-11.85% copper were tested to establish “the leachability of copper via sulphuric acid and cyanide reagents, simulating standard copper heap leach and vat leach processing options”.
• Results from the tests using sulphuric acid showed recovery rates ranging between 83-99% “confirming potential for conventional acid leach processing”.
• Describing the results as “an exciting step forward in unlocking value from the Big One Deposit … [Chairman, Gerrard Hall, said that they] … support our partnership with Austral Resources and the processing optionality offered through their Mt Kelly facility”.
• Mr. Hall confirmed that work is continuing to secure mining approvals and “expand metallurgical test work … [while remaining] … focused on advancing the Big One Deposit into a potential near-term source of high-grade copper production”.
• Samples tested for leachability using cyanide reagents “displayed cyanide-leachable Cu values above 10%, indicating the presence of copper sulphide minerals, such as covellite, chalcocite, bornite or potentially native copper. These minerals are not readily soluble in acid but respond to cyanide leaching, suggesting that a minor portion of the copper inventory may require alternative or supplemental recovery methods”.
• Today’s announcement comments that the tests suggest “that mineralised material from the Big One stockpiles is highly compatible with the existing processing flowsheet at Austral Resources’ Mt Kelly facility, supporting the potential for streamlined integration into established infrastructure”.

Conclusion: Bulk test results demonstrate that stockpiled material at the Big One deposit in Queensland is amenable to sulphuric acid leaching.

Rockfire Resources (ROCK LN) 0.1p, Mkt Cap £3.4m – £2m placing to progress the Molaoi zinc project in Greece

• Rockfire Resources reports that it has conditionally raised £2m via the placing of 2bn additional shares at a price of 0.1p/share.
• “The Placing was led by ACAM … which is subscribing for 1,000,000,000 new Ordinary Shares, representing £1 million and following the issue of the New Ordinary Shares, will hold 16.31% of the total voting rights of the Company”.
• In addition, holders of the new shares “will receive warrants over, in aggregate, 1,000,000,000 New Ordinary Shares, representing 1 warrant for every 2 new Ordinary Shares subscribed for”.
• The warrants are “exercisable at the Issue Price for a period of 24 months”.
• Welcoming the additional investor support, CEO, David Price, confirmed that the funds “will be put directly into drilling at Molaoi to achieve our upgrade from Inferred to Indicated status according to the JORC code for reporting”.
• Molaoi currently “has a JORC Inferred Mineral Resource of 15.0 million tonnes @ 7.26% Zn, 1.75% Pb and 39.50g/t Ag” reported at a 4% cut-off.
• The additional funds will also be used to progress an initial estimate of Molaoi’s germanium resource “following additional drilling”.
• Noting that, when a JORC compliant germanium resource estimate for Molaoi is available it will “be the only germanium resource known within Europe and will be unique globally” the company reports that a “preliminary germanium quantity, (not yet compliant with the JORC Code) has been calculated at 4.8 MT @ 21.9 g/t Ge (105,700 kg germanium)”.

Conclusion: Rockfire Resources has secured additional funds for drilling as it works to upgrade the current JORC ‘Inferred’ zinc resource and produce an initial estimate for the germanium content of its Greek project.

WIA Gold* (WIA AU) A$0.26, Mkt Cap A$355m – Additional high-grade drilling results in Namibia

• WIA, who are developing the Kokoseb gold project in Namibia, reports additional drilling results.
• Southern Zone:
  • KRC437: 50m at 12g/t Au from 188m (inc. 528g/t Au over 1m)
  • KRC410: 24m at 2.42 g/t Au from 100m
  • KRC412: 23m at 2.36 g/t Au from 92m
  • KRC414: 27m at 2.34 g/t Au from 123m
• Central Zone drilling extending high-grade shoot
  • KDD074: 10m at 2.1g/t Au from 116m, 3m at 7.3g/t Au from 211m, 5.4m at 7.9g/t Au from 219m, 7m at 2.4g/t Au from 249m, 7m at 2.3g/t Au from 260m, 3.6m at 13g/t Au from 283m
  • KDD064 extends high-grade shoot by 200m down plunge with 9.7m at 4.66g/t Au from 478m and 5.7m at 5.82g/t Au from 493m
• Infill drilling:
  • 28m at 1.6g/t Au from 9m, 33m at 1.47g/t Au from 87m, 31m at 1.6g/t Au from surface
• Company reports all zones at Kokoseb remain open at depth.
• WIA states that all of the assays reported today will be included in their upcoming MRE update, which is set to be released in July.
• WIA previously guided for a scoping study due 3Q25.

*An SP Angel Analyst holds shares in WIA Gold

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

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.

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