SP Angel Morning View -Today’s Market View, Tuesday 25th April 2023

Metals pull back on concerns over China’s growth

MiFID II exempt information – see disclaimer below

Anglo American (AAL LN) – Ramp up at Quellaveco and improved iron ore and metallurgical coal performance drives increased production.

Bluejay Mining* (JAY LN) – Equity subscription cancelled with Towards Net Zero

Sibanye-Stillwater* (SSW SJ) – annual report & resumption of production at Stillwater West following shaft damage &

Strategic Minerals* (SML LN) – March quarter magnetite sales and project update.

Gold – $1,990/oz – Gold bounces as investors buy US Treasuries, weighing on yields

  • Gold prices bounced $24/oz yesterday to $2,000/oz before sliding again to $1,990/oz this morning.
  • The move tracks a sharp fall in US Treasury yields, with the 10-year sliding to 3.45% having touched highs of 3.65% last week.
  • Gold correlates directly with US Treasuries, with lower yields pushing investors to non-interest-bearing gold as a safe-haven asset.
  • Yesterday’s move followed the Dallas Fed Manufacturing Survey, which came in well below the -14.6 expected at -23.4, adding concerns to the state of the US industrial economy.
  • Global gold consumption in China grew 12% in the March quarter.

Copper slides on weak Chinese demand and rate hike concerns

  • Copper prices slid again to $8,715/t, hitting a two-week low.
  • Traders are concerned over weak expected demand from China and the longer-term impact of the US Fed’s rate hike programme on demand.
  • Shanghai traders flipped bearish with a net short position on copper in the run up to April data drops.
  • Chinese NBS ‘National Bureau of Statistics’ refined copper output rose 9% to 1.05mt in March

Aluminium – IAI ‘International Aluminium Institute’ global refined output rose 9.5% mom and 0.5% yoy to 5.77mt in March

  • China produced 59% of global production or 3.39mt

Iron ore prices in freefall as pessimism continues over China steel demand

  • Singapore iron ore prices have fallen 12% over the past week, trading at $103/t now.
  • The market continues to be disappointed by steel mill demand, with demand unexpected to pick up despite the peak construction season.
  • Iron ore players are hoping for a major restocking from mills in the run up to May’s Golden Week holiday.

Philippine Nickel major plans two new mines and potential refinery

  • Nickel Asia, the largest Philippine supplier, is looking to open two new mines next year in a bid to tap into growing demand from the EV sector.
  • The Company is also considering a new processing facility, according to its CEO Zamora. (Bloomberg)
  • The company expects a market deficit by 2027 and commented on a $20,000/t floor for the price of nickel.
  • Nickel Asia currently holds stakes in two acid-leaching plants operated by Sumitomo Metal/
Dow Jones Industrials +0.20% at 33,875
Nikkei 225 +0.09% at 28,620
HK Hang Seng -1.73% at 19,614
Shanghai Composite -0.32% at 3,265


US$ interbank liquidity improves as central banks along with the Fed switch back from daily to weekly auctions for US$ funding, Bloomberg writes.

  • The US central bank and its counterparts in the eurozone, Canada, Japan, the UK and Switzerland introduced daily dollar liquidity provisions in March amid a run on a number of financial institutions.
  • “In view of the improvements in US dollar funding conditions and the low demand at recent US dollar liquidity-providing operations,” the institutions “have jointly decided to revert the frequency of their 7-day operations from daily to once per week,” according to a statement.
  • Fed FOMC meeting next week
  • CREI ‘Commercial Real Estate Industry’ vacancies rise to 18.6% in Q1, 5.9% higher than the last pre-Covid quarter of Q4 2019
  • The rising CREI rate must be causing some concern amongst highly leveraged commercial property funds and their lenders
  • Chicago Fed national activity index remained unchanged at -0.19 in March
  • Dallas Fed regional manufacturing index fell -23.4 in April vs -15.7 in March
  • US$ represents 58% vs 59% a year ago of Global official Central Bank FX reserves with the US dollar (IMF data)

First Republic Bank results showed a 40% ($72bn) drop in its deposits in Q1/23 following a bank run that saw a number of nation’s major lenders providing $30bn to the bank in mid-March.

  • Shares traded 22% lower following the results announcement.
  • The bank has lost 90% of its stock value.

Chinese EV and lithium producers suffer stock sell-off as earnings season disappoints on slowing demand

  • Battery maker Jiangsu Azure sold off 10% yesterday on disappointing earnings, whilst Tianqi Lithium and Ganfeng Lithium sold off 8% and 7% respectively.
  • Fulin Precision, which produces auto parts and new energy lithium battery cathode materials, saw revenues fall 56% yoy.
  • The Company noted the sliding price of lithium carbonate causing a ‘valuation writeoff.’
  • Xinxiang Tianli Energy, which produces lithium-electric ternary cathode materials, saw net profits fall 99% and Q1 revenue fall 15%.
  • Hunan Changyuan Lico, another battery material producer, saw earnings fall 99.7%.

Evergrande looking to use its New Energy Vehicle group to support its restructuring plan

  • The plan requires 75% creditor consent.
  • Evergrande is looking to take over residental and property projects within the NEV unit to help make the NEV group attractive to offshore creditors,

Japan – New head of the BOJ backed the current monetary policy stance saying there is currently no evidence of “runaway inflation”.

  • “We see risk of inflation undershooting forecast as bigger than risk of overshooting, which is why BOJ must maintain easy policy now,” Kazuo Ueda told the Japanese Parliament today.
  • The central bank is due to hold its policy meeting at the end of the week which would the first one for Kazuo Ueda as governor.
  • The yen is little changed at 134.1 against the US$ this morning.

South Korea – The economy avoided a recession with growth coming in stronger than expected in Q1/23.

  • Domestic consumption improved during the quarter supporting growth while weaker exports weighed on trade amid falling semiconductor prices.
  • GDP (%qoq): 0.3 v -0.4 Q4/22 and 0.2 est.
  • GPD (I%yoy): 0.8 v 1.3 Q4/22 and 0.9 est.

Singapore – CPI rose 0.5% in March vs 0.6% in February

  • CPI rose 5.5% yoy in march vs 6.3% yoy in February

EU – ECB Philip Lane comments it is inappropriate to leave deposit rate at current 3% next week

Germany – Ifo business climate index rose to 93.6 in April vs 93.2 in March

Turkey – Ifo business confidence index climbed to 108 in April vs 105.2 in March

  • Capacity utilisation also rose to 75.4% vs 73.5%


US$1.1038/eur vs 1.0977/eur yesterday. Yen 134.22/$ vs 134.28/$. SAr 18.218/$ vs 18.170/$.  $1.247/gbp vs $1.243/gbp. 0.668/aud vs 0.668/aud. CNY 6.913/$ vs 6.901/$.

Dollar Index 101.46 vs 101.89 yesterday.

Commodity News

Precious metals:

Gold US$1,996/oz vs US$1,980/oz yesterday

Gold ETFs 93.3moz vs US$93.4moz yesterday

Platinum US$1,092/oz vs US$1,101/oz yesterday

Palladium US$1,537/oz vs US$1,577/oz yesterday

Silver US$25.16/oz vs US$24.92/oz yesterday

Rhodium US$8,000/oz vs US$7,900/oz yesterday

Base metals:   

Copper US$ 8,714/t vs US$8,785/t yesterday

Aluminium US$ 2,365/t vs US$2,378/t yesterday

Nickel US$ 24,265/t vs US$24,250/t yesterday

Zinc US$ 2,663/t vs US$2,693/t yesterday

Lead US$ 2,128/t vs US$2,145/t yesterday

Tin US$ 26,260/t vs US$26,225/t yesterday


Oil US$82.8/bbl vs US$80.5/bbl yesterday

  • Crude oil prices edged higher despite continued uncertainty on the outlook for the global economy and refined product demand.
  • Spot European energy prices are currently trading at the equivalent of $68/bbl in the UK and $61/bbl on the Continent, below the price of Brent crude but still significantly higher than the $13/bbl price of US HH gas.

Natural Gas US$2.235/mmbtu vs US$2.189/mmbtu yesterday

Uranium UXC US$51.00/lb vs US$51.00/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$102.3/t vs US$107.0/t

Chinese steel rebar 25mm US$555.1/t vs US$558.7/t

Thermal coal (1st year forward cif ARA) US$134.0/t vs US$134.0/t

Thermal coal swap Australia FOB US$184.0/t vs US$189.0/t

Coking coal swap Australia FOB US$286.0/t vs US$286.0/t



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

NdPr Rare Earth Oxide (China) US$67,630/t vs US$68,981/t

Lithium carbonate 99% (China) US$22,061/t vs US$22,100/t

China Spodumene Li2O 5%min CIF US$4,090/t vs US$4,190/t

Ferro-Manganese European Mn78% min US$1,363/t vs US$1,356/t

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

China Graphite Flake -194 FOB US$780/t vs US$780/t

Europe Vanadium Pentoxide 98% 8.5/lb vs US$8.5/lb

Europe Ferro-Vanadium 80% 33.95/kg vs US$34.25/kg

China Ilmenite Concentrate TiO2 US$341/t vs US$344/t

Spot CO2 Emissions EUA Price US$95.6/t vs US$96.5/t

Brazil Potash CFR Granular Spot US$405.0/t vs US$405.0/t

Company News

Anglo American (AAL LN) 2456p, Mkt Cap £33.6bn – Ramp up at Quellaveco and improved iron ore and metallurgical coal performance drives increased production.

  • Anglo American reports an overall 9% rise in production during Q1 2023 compared to Q1 2022 and is currently maintaining both production and cost guidance for 2022.
  • A 28% increase in copper output to 178,100t (Q1 2022 – 139,500t) reflected the continuing ramp-up at Quellaveco in Peru more than offsetting a 15% decline in Chilean production to 118,600t “due to planned lower grades at both Los Bronces and Collahuasi”.
  • Quellaveco produced 59,500t of copper during the quarter while production from Los Bronces fell by 19% to 52,700t and Collahuasi’s output was 13% lower than in Q1 2022 at 57,100t.
  • Anglo American reports a continuation of the drought in Central Chile which constrain water supply and notes that amongst its mitigation initiatives it expects that from “2025, more than 45% of Los Bronces’ needs will be met through a desalinated water supply”.
  • Copper production guidance for 2023 remains intact in the range 840-930,000tr with Chilean output expected to contribute 530-580,000t and Peru a further 310-350,000t.
  • Unit cost guidance for copper production for 2023 also remains unchanged at ~US$1.56/lb with Chilean output at ~US$1.90/lb and Peruvian production at ~US$1.00/lb.
  • Iron ore output rose by 15% to 15.1mt (Q1 2022 – 13.2mt) with Kumba increasing by 14% to 9.4mt and Minas Rio’s output rising by 16% to 5.7mt.
  • The company’s 2023 guidance is maintained at 57-61mt (Kumba 35-37mt and Minas Rio 22-24mt) at a cost of US$39/t (Kumba US$~44/t and Minas Rio ~US$32/t).
  • A 12% increase in quarterly diamond output from De Beers’ Botswana operations to 6.9m carats and a 37% rise from Namibia to 619,000 carats and an 11% increase in Canadian output to 673,000crats was offset by a 56% fall in South African output leaving overall Q1 output steady at 8.9m carats (Q1 2022 – 8.9m carats).
  • The increased diamond output form Botswana reflected “the planned treatment of higher grade ore and continued strong plant performance at Orapa … [while the increased Namibian production was] … primarily driven by the contribution from the Benguela Gem vessel, which commenced production in March 2022”.
  • The decline in South African diamond output results from “the planned completion of the Venetia open pit in December 2022. Venetia continues to process lower grade surface stockpiles, which will result in temporary lower production levels as it transitions to underground operations”.
  • Canadian diamond production “increased by 11% to 0.7 million carats, despite unplanned maintenance challenges”.
  • Diamond production guidance for 2023 remains intact in the range 30-33m carats at a cost of ~US$80/carat.
  • Platinum group metals (PGMs) output declined by 6% compared to Q1 2022 to 901,000oz as a result of unplanned plant maintenance and lower grades at Mogalakwena, as well as planned infrastructure closures at Amandelbult in Q4 2022.
  • Refined PGM output “decreased by 13% to 626,000 ounces, primarily due to the ramp-up of the Polokwane smelter at the end of January 2023 following its rebuild, and asset integrity work at Waterval smelter as well as the impact of Eskom load-curtailment”.
  • PGM production guidance for 2023 remains in the range 3.6-4.0moz of metal in concentrate and refined production subject to the impact of Eskom load-curtailment” with costs expected to be ~US$1,025/PGM oz.
  • Improved operating performance at Codemin as well as improved metal recovery at Barro Alto offset the impact of a planned grade decline to increase nickel production by 4% to 9,700t.
  • Nickel production and cost guidance for 2023 is maintained in the range 38-40,00t at a cost of ~US$5.15/lb.
  • Producing longwalls at Grosvenor, Moranbah and Aquila contributed to a 59% rise in steelmaking coal production to 3.5mt (Q1 2022 – 2.2mt) with the “ratio of hard coking coal production to PCI/semi-soft coking coal was 80:20, broadly in line with Q1 2022 (79:21), as the higher contribution of premium hard coking coal from Grosvenor and Moranbah in this quarter was offset by higher volumes of PCI/semi-soft coals from the open cuts compared to Q1 2022”.
  • Guidance for the full year remains between 16-19mt of steelmaking coal at a cost of ~US$105/t.
  • Commenting on the quarterly production report, CEO, Duncan Wanblad, confirmed that “We continue to make progress towards our suite of sustainability ambitions and organic growth options in future-enabling products and we welcome the recent approval of the environmental permit application for our Los Bronces Integrated Project, which sets up the next phase of development for one of the world’s largest copper mines”.

Conclusion: Anglo American is maintaining its 2023 production and cost guidance across all commodities as Q1 production rises.

Bluejay Mining* (JAY LN) 3.18p, Mkt cap £34m – Equity subscription cancelled with Towards Net Zero

  • Bluejay Mining report the cancellation of their equity subscription arrangement with TNZ ‘Toward Net Zero’.
  • The cancellation of the arrangement means that TNZ will not now get the shares that they would have received under the subscription.
  • Bluejay have agreed to repay the US$2m cash lump sum advanced and will now not issue any shares which would have been issued at a price in accordance with the TNZ subscription agreement.
  • Management are in discussions with other financing groups over the funding of the drill programme at the 100% owned Lead-Zinc-Silver Kangerluarsuk Project which sits very close to the former Black Angel, Greenland’s most historically profitable mine in West Greenland. The mine operated over 19 years producing over 12 million tonnes at over 16% ZnEq. The entire district is very fertile with multiple expressions of mineralisation at surface.
  • An airborne geophysics program completed in 2022 identified newly discovered exposures of formations that are known to host Zn-Pb-Ag mineralization at Kangerluarsuk; iinferred to correlate with the Mârmorilik Formation that hosts the former Black Angel mine, which further increases the propspectivity of Bluejay’s licence areas.
  • In the same theme of drilling close to known and former mines, Bluejay also aims to extend the mineralised E Lode at its VMS style Hammashlathi property in Finland, which was an operating open pit and underground mine profitably producing copper, zinc, gold and silver. All known ore lodes and open on strike and depth, an easy win for any 2023 drill program.
  • Dundas: management continue to optimise and refine the DFS for the Dundas titanium mineral sands project in the north of Greenland.
  • Ilmenite concentrate prices continue to rise equating to $340/t EXW China following a period of destocking last year.
  • Kenmare Resources which ships ilmenite concentrate, recently reported ‘chloride pigment production in China rebounded strongly in Q1 2023 and demand from the titanium metal sector continued to increase’.
  • They went on to say ‘spot ilmenite prices in China have increased in recent weeks, benefitting from stronger pigment production’.
  • While much may change in Bluejay’s optimised feasibility study we feel confident that the mine should report significant value when applying current Chinese ilmenite prices.

Conclusion:  We are impressed and relieved that management have taken the decision to ditch the TNZ financing arrangement and feel confident the company should now be set on a better path.

We share Bluejay’s confidence for drilling success at both Kangerluarsuk and Hammashlathi, both of which will assist Bluejay bolster its portfolio, and look forward to the recognition of greater value in these and at the Dundas titanium mineral sands project as well as the future potential of the well-known Disko-Nuussuaq Nickel-Copper project.

*SP Angel acts as nomad and broker to Bluejay Mining.

Sibanye-Stillwater* (SSW SJ) ZAR 3,982, Mkt cap ZAR 113bn – annual report & resumption of production at Stillwater West following shaft damage &

  • Sibanye Stillwater has recommissioned the vertical shaft at the Stillwater West mine following an incident in March.
  • The Company expects production to build up over the next fortnight to normalised levels.
  • Sibanye expects the production halt to hit production by between 25keoz-30keoz of PGMs for the full year.
  • Production continued at the East Boulder mine and the Stillwater East operations throughout the delay period.
  • The company notes production was hit by two primary factors in 2022, flooding at the US PGM operations in May 2022 and industrial action and lockout at the South African gold operations.
  • Total mine production at the US PGM operations fell to 421koz in 2022 vs 570koz in 2021.
  • The US PGM operations saw AISC in 2022 jump 58% to $1,586/eoz, but this was primarily due to falling production.
  • The SA PGM operations saw AISC climb 14% to $1,180/eoz, citing loadshedding, geotechnical challenges and copper cable theft.
  • The SA gold operations saw 621koz produced, vs 1,073koz in 2021 with AISC jumping from $1,689/oz to $2,410/oz. The team expects a more stable operating period for 2023 and improving costs.
  • Cash reserves stand at $1.5bn.

*An SP Angel mining analyst has visited Sibanye’s Montana operations.

Strategic Minerals* (SML LN) 0.18p, Mkt Cap £5.0m – March quarter magnetite sales and project update.

  • Strategic Minerals reports the sale of 4.734t of magnetite product from its Cobre operation in New Mexico realising US$415,000 during the three months to 31st March 2023.
  • The company also reports a 31st March cash balance of US$0.28m.
  • During the equivalent quarter in 2022, sales of 10,609t realised US$615,000 and Strategic Minerals explains that although sales to its ‘fertiliser’ customers are holding up, slower US economic growth has impacted demand from its ‘cement’ customers “with the Company’s largest client continuing to suspend purchases whilst it runs down its existing stockpile”.
  • Strategic Minerals says that the lower demand “has been partially offset by the 20% price increase in July 2022” and we estimate that unit prices in the March quarter were around US$87.65/t compared with US$62.50/t a year earlier.
  • The company takes the opportunity to advise that its planned debt and equity funding to restart copper production at its Leigh Creek project in S Australia is to be reviewed as ”negative market sentiment” arising from … [industry-wide] … mining cost increases … [reduces] … the level of profitability … [to a point that] … no longer supports the lending ratios associated with a pure debt facility”.
  • Discussions are being resumed with “parties that have previously shown an equity interest in LCCM”.
  • Expressing disappointment at the setback to debt funding for Leigh Creek, Managing Director, John Peters confirmed that Strategic Metals continues “to seek funding for Leigh Creek and feel that commodity prices may yet enhance the project’s profitability further”.
  • Commenting on its SW England exploration programme and participation in the ‘Deep Digital Cornwall’ project, the company notes that re-examination of existing drill core from hole CRD-032 “highlights areas of interest within the borehole section, outside of the existing resource, for follow up and further investigation.  This has the potential to expand the inferred resource without additional drilling”.
  • Although there have been delays to the consideration of grant funding by the Cornwall and Isles of Scilly Council, Strategic Minerals expresses confidence that “at some stage the Project is likely to benefit from Governmental funding” as it meets the criteria for the UK Government’s Critical Minerals Strategy and offers potential to provide stable, long-term and well paid employment in east Cornwall matches the objectives of the UK’s regional ‘Levelling-Up’ policy.
  • A decision on the current grant funding is now expected following a review meeting in late June and the Mr. Peters said that it will “assess the scope of its operations at Redmoor in 2023” when the outcome of the grant application is known.
  • Strategic Mineral’s non-executive director, Jeff Harrison, is to retire from the Board after five-years in office, however his expertise remains available tin a consulting role.

*SP Angel acts as Nomad and Broker to Strategic Minerals

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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