{"id":112604,"title":"SP Angel Morning View -Today’s Market View, Thursday 8th February 2023","publisher":"Share Talk","author":"sharetalk","published":"2024-02-08T10:50:51+00:00","modified":"2024-02-08T10:50:51+00:00","canonical_url":"https://www.share-talk.com/sp-angel-morning-view-todays-market-view-thursday-8th-february-2023/","markdown_url":"https://www.share-talk.com/sp-angel-morning-view-todays-market-view-thursday-8th-february-2023.md","json_url":"https://www.share-talk.com/sp-angel-morning-view-todays-market-view-thursday-8th-february-2023.json","category":"Blogs","categories":["Blogs","SP Angel","Technology","Technology, Media & Telecoms"],"tags":["base metals","battery","china","company news","currencies","Dow Jones Industrials","ENERGY","FRANCE","GERMANY","gold prices","HK Hang Seng","Nikkei 225","Rio Tinto","Shanghai Composite","SP Angel"],"featured_image":"https://i0.wp.com/www.share-talk.com/wp-content/uploads/2023/10/SP-Angel.jpg?fit=750%2C406&quality=89&ssl=1","format":"news","language":"en-GB","content":"**Stronger deflation in China adds to calls for more stimulus**\n\n**MiFID II exempt information – see disclaimer below**\n\n**Anglo American (AAL LN) – Q4/23 and FY23 production update**\n\n**Power Metal Resources* (POW LN) – Drilling starts at Molopo Farms Complex**\n\n|   |   |   |   |   |\n| --- | --- | --- | --- | --- |\n| **Dow Jones Industrials** |  | **+0.40%** | **at** | **38,677** |\n| **Nikkei 225** |  | **+2.06%** | **at** | **36,863** |\n| **HK Hang Seng** |  | **-1.27%** | **at** | **15,878** |\n| **Shanghai Composite** |  | **+1.28%** | **at** | **2,866** |\n\n**Economics**\n\n**US – More Fed officials expressed their views that the timing on the first rate cut is currently uncertain.**\n\n- Governor Adriana Kugler, Boston Fed President Susan Collins (non voting) and Richmond Fed President Thomas Barkin (non-voting) were all noncommittal on the start of policy easing in their latest comments, Blomberg writes.\n\n- Markets are currently seeing an 80% chance of a rate cut in May compared to a fully priced in move same time last week.\n\n**China – Deflation accelerates in January coming in higher than forecasts in a sign of deteriorating demand dynamics.**\n\n- CPI dropped 0.8%yoy last month marking the sharpest decline since Sep/09.\n\n- The data may add to calls for authorities to add more stimulus to the economy helping confidence to recover.\n\n- Core CPI that excludes volatile food and energy costs climbed 0.4%yoy, slower than in December in a weakest increase since June 2023.\n\n- Separately, China replaced its head of the main securities regulator amid ongoing rout in the equities market.\n\n- PPI (%yoy): -2.5 v -2.7 December and -2.6 est.\n\n- CPI (%yoy): -0.8 v -0.3 December and -0.5 est.\n\n**Japan – The yen is weakening against the US$ on dovish comments from the BOJ Deputy Governor.**\n\n- “Even if the bank were to terminate the negative interest rate policy, it is hard to imagine a path in which it would then keep raising the interest rate rapidly,” Shinichi Uchida said.\n\n**Israel – Hamas offer for the release of hostages in exchange for a ceasefire and a withdrawal of Israeli military from Gaza faced different reactions from Israel and US sides.**\n\n- Hamas demands a four and a half month ceasefire in Gaza, an Israeli military withdrawal from the territory and the release of at least 1,500 Palestinian prisoners as part of a three phase deal to release of the remaining hostages, FT writes.\n\n- The proposal followed a meeting with top officials from Qatar, Egypt, the US and Israel held previously in Paris.\n\n- PM Natanyahu rejected the proposal straight away while US Secretary of State Antony Blinken said it opened space for a deal, Bloomberg reports.\n\n- “Surrendering to the delusional demands of Hamas not only will not lead to the release of the hostages, it will only invite another massacre,” Netanyahu said in a news conference hours before Blinken spoke.\n\n- “While there are some clear nonstarters in Hamas’s response, we do think it creates space for agreement to be reached and we will work at that relentlessly until we get there,” Blinken told reporters.\n\n**Azerbaijan – President Ilham Aliyev secured a fifth consecutive term winning 92% of the vote.**\n\n- Elections were called 14 months early after government forces established full control of Nagorno-Karabakh region last September.\n\n- Turnout was 67.7% translating into more than 60% of those registered to vote backing Aliyev.\n\n- For the first tine in the nation’s post Soviet history, polling stations opened in the Karabakh region, where President went to cast his ballot in the region’s main city of Khakendi, DW reports.\n\n- President Aliyev is set to serve another seven year term and is able to participate in next elections following a referendum in 2009 that removed the limit on the number of terms.\n\n**Currencies**\n\n**US$1.0777/eur vs 1.0764/eur previous. Yen 148.81/$ vs 147.99/$. SAr 18.950/$ vs 18.858/$. $1.263/gbp vs $1.263/gbp. 0.651/aud vs 0.652/aud. CNY 7.196/$ vs 7.193/$.**\n\n**Dollar Index** **104.07 vs 104.08 previous.**\n\n**Commodity News**\n\n**Precious metals:**\n\n**Gold US$2,031/oz vs US$2,033/oz previous**\n\n**Gold ETFs 83.6moz vs 83.8moz previous**\n\n**Platinum US$882/oz vs US$900/oz previous**\n\n**Palladium US$887/oz vs US$941/oz previous**\n\n**Silver US$22.29/oz vs US$22/oz previous**\n\n**Rhodium US$4,400/oz vs US$4,425/oz previous**\n\n**Base metals:**\n\n**Copper US$ 8,339/t vs US$8,403/t previous**\n\n**Aluminium US$ 2,240/t vs US$2,224/t previous**\n\n**Nickel US$ 16,105/t vs US$15,900/t previous**\n\n**Zinc US$ 2,408/t vs US$2,421/t previous**\n\n**Lead US$ 2,106/t vs US$2,109/t previous**\n\n**Tin US$ 25,910/t vs US$25,330/t previous**\n\n**Energy:**\n\n**Oil US$79.5/bbl vs US$78.8/bbl previous**\n\n- Crude oil prices edged higher despite the EIA reporting a 5.5mb w/w US crude build, offset by ~3mb draws to both gasoline and distillate stocks, as refinery utilisation fell to 82.4% and production rebounded to 13.3mb/d.\n\n- European energy prices were stable as EU natural gas storage levels fell 2.3% w/w to 68.3% full (vs 54.3% 5-Yr average), with Germany reporting levels at 73.7% full and aggregate storage at 778TWh.\n\n- US natural gas prices fell below $2/mmBtu for the first time in almost 12M on expectations that mild winter temperatures would continue to impact heating demand to leave domestic stockpiles above average.\n\n**Natural Gas €28.2/MWh vs €28.1/MWh previous**\n\n**Uranium Futures $102.9/lb vs $103.0/lb previous**\n\n**Bulk:**\n\n**Iron Ore 62% Fe Spot (cfr Tianjin) US$124.7/t vs US$124.7/t**\n\n**Chinese steel rebar 25mm US$569.7/t vs US$569.9/t**\n\n**Thermal coal (1st year forward cif ARA) US$94.5/t vs US$94.8/t**\n\n**Thermal coal swap Australia FOB US$123.3/t vs US$122.3/t**\n\n**Coking coal swap Australia FOB US$310.0/t vs US$310.0/t**\n\n**Other:**\n\n**Cobalt LME 3m US$29,135/t vs US$29,135/t**\n\n**NdPr Rare Earth Oxide (China) US$55,448/t vs US$55,468/t**\n\n**Lithium carbonate 99% (China) US$12,299/t vs US$12,303/t**\n\n**China Spodumene Li2O 6%min CIF US$1,000/t vs US$1,000/t**\n\n**Ferro-Manganese European Mn78% min US$1,062/t vs US$1,060/t**\n\n**China Tungsten APT 88.5% FOB US$305/mtu vs US$305/mtu**\n\n**China Graphite Flake -194 FOB US$565/t vs US$565/t**\n\n**Europe Vanadium Pentoxide 98% 5.8/lb vs US$5.8/lb**\n\n**Europe Ferro-Vanadium 80% 27.55/kg vs US$27.55/kg**\n\n**China Ilmenite Concentrate TiO2 US$320/t vs US$320/t**\n\n**Spot CO2 Emissions EUA Price US$65.9/t vs US$66.3/t**\n\n**Brazil Potash CFR Granular Spot US$292.5/t vs US$292.5/t**\n\n**Battery News**\n\n**Toyota to invest $1.3bn for EV production at Kentucky plant**\n\n- The Japanese automaker will invest $1.3bn for EV and hybrid production at its plant in Georgetown, Kentucky\n\n- The latest investment takes Toyota’s total investment to $10bn since it built in Kentucky in 1988.\n\n- Kentucky is the largest facility for Toyota globally and in May, the company announced plans to build an all-new battery electric Toyota SUV starting in 2025.\n\n- The $1.3bn investment will also facilitate in-house battery pack assembly.\n\n**China NEV sales drop mom for first time since August**\n\n- Sales were up 102% yoy, but down 29% from December, the first drop in sales since August 2023.\n\n- The China Passenger Car Association estimated that sales would equal around 800,000 units for January.\n\n- Preliminary data shows that sales only reached 670,000 units.\n\n**Tesla sell only one vehicle in South Korea in January**\n\n- According to Seoul-based research Carisyou and the Korean trade ministry, only one Tesla was sold in South Korea in January.\n\n- Safety concerns, price and lack of infrastructure have weighed on demand.\n\n- The number of new EV registrations in Korea fell 80% from December to January.\n\n**Company News**\n\n**Anglo American (AAL LN) 1,780p, Mkt Cap £21.6bn – Q4/23 and FY23 production update**\n\n- Q4/23 production was in line with management expectations and in line with Q3/23.\n\n- Base metals production:\n\nCopper 230kt (-6%yoy) in Q4/23 and 826kt (+24%) in FY23;\n\n- Nickel 11.1kt (+9%) and 40.0kt (+1%).\n\nQuellaveco copper mine in Peru (93.7kt Q4/23 / 319.0kt FY23) recorded highest quarterly production after reaching commercial production in Jun/23.\nPGMs production 932koz (-6%) and 3,806koz (-5%).\nDiamonds production 7.9mcts (-3%) and 31.9mcts (-8%).\nBulk commodities production:\n\n- Iron ore 13.8mt (-12%) and 59.9mt (+1%);\n\n- Steelmaking Coal 4.8mt (+2%) and 16.0mt (+7%);\n\n- Manganese 848kt (-14%) and 3,671kt (-2%).\n\nRealised prices for the FY23 pulled back strongly for nickel (-25%yoy), PGMs (-35%), diamonds (-25%) and steelmaking coal (-13% for HCC and -21% for PCI).\nWeakness in nickel prices see the Company reviewing the carrying value of Barro Alto operations with a potential write-down alluded to for FY23.\nAdditional exceptional charges to FY23 results are expected to come from increased rehabilitation provisions for Chilean copper assets (~$0.1bn charge) and an De Beers inventory value write down (~$0.1bn).\nRealised prices for copper and iron ore were little changed.\nFY24 guidance implies a slight reduction in output of copper (730-790kt), nickel (36-38kt), PGMs (3.3-3.7moz) and diamonds (29-32mt) with relatively little change in iron ore (58-62mt) and steelmaking coal (15-17mt).\nFY24 guidance is unchanged from previous estimates released in December with management reiterating the strategy to prioritise “value over volume”.\n\n**Power Metal Resources* (POW LN) 0.99p, Mkt Cap £23m – Drilling starts at Molopo Farms Complex**\n\n- The Company launches diamond drilling at the Molopo Farms Complex Project in Botswana.\n\n- The drill is onsite and is targeting a steeply-dipping high-priority conductor at target area T1-14.\n\n- The target was refined on the back of results from ground geophysics surveys carried over areas T1-14 and T1-9.\n\n- Drilling is exploring for nickel and PGE mineralisation with a targeted drilling depth of 700-800m.\n\n**SP Angel acts as Nomad and Broker for Power Metal Resources*\n\n**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%”**\n\n**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%”**\n\nThe SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020\n\n**Analysts**\n\n**John Meyer – **[John.Meyer@spangel.co.uk](mailto:John.Meyer@spangel.co.uk)** – 0203 470 0490**\n\n**Simon Beardsmore – **[Simon.Beardsmore@spangel.co.uk](mailto:Simon.Beardsmore@spangel.co.uk)** ****– 0203 470 0484**\n\n**Sergey Raevskiy –**[Sergey.Raevskiy@spangel.co.uk](mailto:Sergey.Raevskiy@spangel.co.uk)** – 0203 470 0474**\n\n**Sales**\n\n**Richard Parlons –**[Richard.Parlons@spangel.co.uk](mailto:Richard.Parlons@spangel.co.uk)** – 0203 470 0472**\n\n**Abigail Wayne – **[Abigail.Wayne@spangel.co.uk](mailto:Abigail.Wayne@spangel.co.uk)** – 0203 470 0534**\n\n**Rob Rees – **[Rob.Rees@spangel.co.uk ](mailto:Rob.Rees@spangel.co.uk%20-)**– 0203 470 0535**\n\n**Grant Barker – ****Grant.Barker**[@spangel.co.uk ](mailto:Rob.Rees@spangel.co.uk%20-)**– 0203 470 0471**\n\n**SP Angel                                                            **\n\nPrince Frederick House\n\n35-39 Maddox Street London\n\nW1S 2PP\n\n*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)*\n\n**+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.**\n\n|   |   |\n| --- | --- |\n| Sources of commodity prices |   |\n| Gold, Platinum, Palladium, Silver | BGNL (Bloomberg Generic Composite rate, London) |\n| Gold ETFs, Steel | Bloomberg |\n| Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt | LME |\n| Oil Brent | ICE |\n| Natural Gas, Uranium, Iron Ore | NYMEX |\n| Thermal Coal | Bloomberg OTC Composite |\n| Coking Coal | SSY |\n| RRE | Steelhome |\n\n|   |   |\n| --- | --- |\n| Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite | Asian Metal |\n|  |  |\n\n**DISCLAIMER**\n\nThis 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.\n\nThis 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.\n\nThis 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.\n\nThis 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.\n\nDistribution of this note does not imply distribution of future notes covering the same issuers, companies or subject matter.\n\nWhere the investment is traded on AIM it should be noted that liquidity may be lower and price movements more volatile.\n\nSPA, 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).\n\nSPA 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.\n\nMiFID 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.\n\nA full analysis is available on our website here [http://www.spangel.co.uk/legal-and-regulatory-notices.html](https://spangel.email.streetcontxt.net/platform/al?a=8058710&ad=1482539566&h=HIB4kp7&sig=U9d83dsEJSa9Wgb20uIlQIMFnWA&v=2&url=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](mailto:tim.jenkins@spangel.co.uk)).\n\nSPA 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 of less than 15%"}