Copper – AI tech selloff slowing data centre developments
MiFID II exempt information – see disclaimer below
Rio Tinto (RIO LN) – $1.9bn investment in Kangwinan bauxite project
Sun Peak Metals (PEAK CN) – Drilling underway in Saudi Arabia
Gold prices slipped below US$4,000/oz for the first time since mid-July on rising oil prices and a sell off in equities
- Prices are on course for its worst week since June.
- Rising energy costs see inflation and Fed tightening risks higher.
- Brent moved over US$113/bbl after Houthi attacks on Saudi Arabia, including the Yanbu port, the Shaybah oilfield and Dammam airport.
Copper US$14,187/t – AI tech selloff slowing data centre developments
- The selloff in AI and related technology stocks may serve to slow the financing and rollout of new AI datacentres in the US and elsewhere
- Firmus, in Australia, has abandoned its IPO as investors failed to support its valuation.
- >75 data centre projects worth ~$130bn in Q1 and 45 project ($68bn) in Q2 were delayed or blocked due to local opposition or regulatory pushback (Data Centre Watch).
- 47 large-scale projects have faced direct delays, withdrawals, or blocks this year (Hindustan Times)
- Copper use in data centres varies from 21-27t per megawatt of power capacity rising to 33-47t/MW for AI training and crypto facilities.
- So a standard 100MW facility may use ~400t in its electrical infrastructure, servers, and network wiring.
- Hyperscale and AI data centres are estimated to use 27,000-50,000t of copper due to their larger power use and added cooling.
- Investors are also losing confidence in Trump’s intentions on raising import tariffs for copper into the US.
- Chinese buyers are expected to buy the dips
- Potential 1.4-1.8mt of physical copper held in the US.
- SHFE copper inventories fell -27% (-19,606t) to 54,356t
- LME inventory gained 800t to 273,750t
- Traders likely to trade a range of $14,000-14,800 but with short-term downside vulnerability if Asian traders fail to support.
Lead – SHFE stocks fall -47% this week
- LME inventories fell 1,800t to 322,175t today .
- But there is allot of lead held off warrant with major traders seen moving stocks aggressively.
- Strong ongoing demand for lead-acid batteries in EVs to support ancillary systems and for starter motors in hybrid and combustion engine vehicles.
- Smelter maintenance may also be a factor constraining physical output with at least one primary lead smelter off line for a month in Central China (SMM).
Rare Earths – GM terminated its long term magnet supply contract with the VAC US unit in July with Energy Fuels suggesting a potential price adjustment on $1.9bn acquisition
- e-VAC Magnetics, a $500m VAC unit in South Carolina (US), was launched late last year with a capacity of just under 2ktpa of NdFeB magnets.
- ~90% of production was planned to be sold to GM with the balance directed to the US government.
- VAC’s US unit said it was seeking damages in arbitration due to wrongful termination.
- The 2023 GM agreement had a minimum term of 10 years across a wide range of EV models.
- The decision is likely related to a scale down in EV manufacturing plans as federal incentives were rolled back.
- Energy Fuels (UUUU US, Mkt Cap US$2bn) agreed in June to acquire VAC for US$1.9bn with more than half paid in stock.
- Energy Fuels said it was aware of the dispute at the time of acquisition and may adjust the purchase price; acquisition is expected to close early 2027.
- Energy Fuels added that its has no concerns regarding VAC quality of products with the latter supplying more than 1,000 customers globally.
Tungsten – The first tungsten price hedge contract has traded on prediction market platform Kalshi
- Risk-management firm Pillar hedged tungsten exposure for an Ohio-based metals distributor, with Susquehanna Predictions structuring and pricing the market and providing liquidity (Bloomberg)
- The contract references SMM’s APT 88.5% CIF Rotterdam assessment, settles on 17 December and trades on Kalshi’s public order book
- The contracts price a strong likelihood that European APT stays above US$2,250/mtu through mid-December, against Asian Metal’s current spot Rotterdam APT US$2,775/mtu spot.
- Tungsten prices surged more than 8x over the last two years on the back of export controls in China, the nation accounts fro ~80% of global tungsten mining capacity and ~85% of APT refining capacity.
- Kalshi plans further contracts on other critical metals, having launched gold and silver perpetual futures in September.
Concern over cyber security in PHP2Shell
- Amazon Threat Intelligence says it detected an attempt to exploit the newly disclosed PHP2Shell backdoor against its MadPot honeypot service (thehackernews.com).
- The security flaws were exposed following the release of patches to make the program safe.
- The breadth of the vulnerability appears to be unprecedented. With the central place in PHP making the vulnerabilities serious, and hard to fix (The Guardian).
- Now the flaw is out in the wild, experts are seeing “exploitation happening at scale” though, so far no major successful hacks appear to have occurred.
- This sort of broadly used software vulnerability has the potential for widespread, global, disruption affecting global trade and growth.
- So far there are no reports of successful hacking activities but we may not know what the hackers are up to for a while yet.
| Dow Jones Industrials | +0.02% | at | 52,868 | |
| Nikkei 225 | -0.34% | at | 62,693 | |
| HK Hang Seng | +0.78% | at | 23,114 | |
| Shanghai Composite | +0.89% | at | 3,690 | |
| US 10 Year Yield (bp change) | +2.1 | at | 4.97 |
Currencies
US$1.1200/eur vs 1.1241/eur previous. Yen 157.08/$ vs 157.15/$. SAr 16.540/$ vs 16.466/$. $1.338/gbp vs $1.340/gbp. 0.702/aud vs 0.702/aud. CNY 6.671/$ vs 6.674/$.
Dollar Index 101.79 vs 101.49 previous.
Economics
US – Trump looking increasingly likely to lose midterm elections
- The view of many American’s is that Trump has simply lost it and they are not prepared to support his antics.
Iran / Houthi strikes against Saudi Arabia have become increasingly sophisticated
- How long will it be before Iran works out how to hit a US aircraft carrier.
- Russia is reported to be supplying the guidance systems and China is supplying rocket motors and other components.
- The US is giving Iran targets to aim at and sooner or later it will work out how to break through.
- Imagine if the US loses three carriers in the Gulf region.
- Iran will be emboldened, local populations might rise to support Iran and the balance of power will shift towards Iran.
Israel – Reports of Israeli bombers turning back at the Iran boarder suggest the US called off an Israeli strike
- The bombers were reported to have been refuelled en-route suggesting unusually heavy payloads eg. MOAB bombs.
- We have also seen reports of MOAB bombs delivered to Israel and heavy munitions to US aircraft carriers in the region.
Japan – Inflation picked up in September, largely in line with expectations, although the BOJ is expected to stay put at the coming 30 October meeting
- Interestingly, ex energy measure of inflation also climbed significantly hitting 2.4% last month, vs 1.9% in August.
- The September hike to 1.25% was the second in three months, the fastest pace of tightening since 1990.
- The yen continued to strengthen helped by flight to safety demand.
- CPI (%yoy, Sep / Aug / Est): 2.1% / 1.9% / 2.1%
- CPI ex Fresh Food (%yoy, Sep / Aug / Est): 2.1% / 1.7% / 2.1%
- CPI ex Fresh Food and Energy (%yoy, Sep / Aug / Est): 2.4% / 1.9% / 2.3%
Eurozone – Growth slowed to a four month low in October with France falling back into contraction
- New orders grew only slightly, and new export orders rose for a third month after four and a half years of continuous decline.
- Employment was broadly flat, with job cuts in France offsetting gains elsewhere.
- Manufacturing input cost inflation was the steepest since May, driven by energy, fuel and transport costs, while output price inflation slowed.
- Business confidence fell to a five-month low, led by manufacturing.
- Preliminary Manufacturing PMI (Oct / Sep / Est): 52.4 / 52.9 / 52.8
- Preliminary Services PMI (Oct / Sep / Est): 51.7 / 53.0 / 52.5
- Preliminary Composite PMI (Oct / Sep / Est): 51.9 / 53.1 / 52.7
Germany
- Preliminary Manufacturing PMI (Oct / Sep / Est): 54.2 / 53.9 / 53.5
- Preliminary Services PMI (Oct / Sep / Est): 51.7 / 52.9 / 52.5
- Preliminary Composite PMI (Oct / Sep / Est): 52.8 / 53.8 / 53.4
France – Bond sales picked up on the back of a broad flight from risk and the threat of another round of weekend protests
- France to Germany spread widened to over 170bp, the highest in 15 years.
- 10y yields hit a high of 5.1% yesterday before pulling back to current ~5.0%.
- Preliminary Manufacturing PMI (Oct / Sep / Est): 49.3 / 50.6 / 50.5
- Preliminary Services PMI (Oct / Sep / Est): 48.4 / 51.2 / 50.7
- Preliminary Composite PMI (Oct / Sep / Est): 48.4 / 51.1 / 50.3
UK – Consumer confidence plunged in October weighed down by higher interest rates, rising inflation and budget uncertainty
- Separately, preliminary PMIs released this morning painted a more upbeat picture.
- New orders rose at the fastest pace in 25 months, helped by AI investment and technology services demand, and manufacturing output hit a 25-month high.
- Employment rose for the first time since September 2024, ending two years of job cuts.
- Input cost inflation was the sharpest since June, driven by energy, raw materials and freight, while output price inflation eased slightly.
Storm Austen cuts power for >9,000 homes in Cornwall and Devon
- Storm Boelo is due to arrive on Saturday
- GfK Consumer Confidence (Oct / Sep / Est): -24 / -13 / -14
- Retail Sales (%mom, Sep / Aug / Est): -0.4% / 0.5% / -0.1%
- Retail Sales ex Auto Fuel (%mom, Sep / Aug / Est): -0.7% / 0.6% / -0.1%
- Preliminary Manufacturing PMI (Oct / Sep / Est): 52.8 / 51.9 / 51.8
- Preliminary Services PMI (Oct / Sep / Est): 53.1 / 52.1 / 51.8
- Preliminary Composite PMI (Oct / Sep / Est): 53.1 / 52.0 / 51.7
Precious metals:
Gold US$4,019/oz vs US$4,092/oz previous
Gold ETFs 101.5moz vs 101.6moz previous
Platinum US$1,566/oz vs US$1,600/oz previous
Palladium US$1,058/oz vs US$1,060/oz previous
Silver US$54.0/oz vs US$56.0/oz previous
Silver ETFs 805.2moz vs 805.8moz previous
Rhodium US$9,150/oz vs US$9,100/oz previous
Base metals:
Copper US$14,187/t vs S$14,143/t previous
Aluminium US$3,016/t vs US$3,003/t previous
Nickel US$15,920/t vs US$16,095/t previous
Zinc US$3,695/t vs US$3,698/t previous
Lead US$1,905/t vs US$1,896/t previous
Tin US$50,590/t vs US$50,325/t previous
Energy:
Oil US$114.0/bbl vs US$111.7/bbl previous
Natural Gas €93.5/MWh vs €89.1/MWh previous
Uranium Futures $90.2/lb vs $90.1/lb previous
Bulk:
Iron Ore 62% Fe Spot (Singapore) US$90.8/t vs US$89.8/t
Chinese steel rebar 25mm US$481.8/t vs US$481.7/t
HCC FOB Australia US$266.0/t vs US$266.0/t
Thermal coal swap Australia FOB US$154.0/t vs US$153.8/t
Other:
Cobalt LME 3m US$34,620/t vs US$34,620/t
NdPr Rare Earth Oxide (China) US$109,870/t vs US$110,725/t
Lithium Carbonate 99% (China) US$14,240/t vs US$14,608/t
China Spodumene Li2O 6%min CIF US$1,485/t vs S$1,485/t
Ferro-Manganese European Mn78% min US$1,045/t vs US$1,045/t
Tungsten APT (China) 88.5% FOB US$1,835/mtu vs US$1,835/mtu
Tungsten APT (Europe) 88.5% Rotterdam US$2,775/mtu vs US$2,775/mtu
China Tantalum Concentrate 30% CIF US$243/lb vs US$243/mtu
China Graphite Flake -194 FOB US$410/t vs US$410/t
Europe Vanadium Pentoxide 98% US$5.3/lb vs US$5.3/lb
Europe Ferro-Vanadium 80% US$25.9/kg vs US$25.9/kg
China Ilmenite Concentrate TiO2 US$176/t vs US$176/t
US Titanium Dioxide TiO2 >98% US$2,917/t vs US$2,917/t
China Rutile Concentrate 95% TiO2 US$1,177/t vs US$1,176/t
Brazil Potash CFR Granular Spot US$355.0/t vs US$355.0/t
Germanium China 99.99% US$4,375.0/kg vs US$4,375.0/kg
China Gallium 99.99% US$450.0/kg vs US$450.0/kg
Europe Molybdenum Oxide 57% US$33.0/lb vs US$33.0/lb
Company news:
| Overnight Change | Weekly Change | Overnight Change | Weekly Change | ||
| BHP | -3.6% | -8.3% | Freeport-McMoRan | -6.3% | -7.8% |
| Rio Tinto | -2.7% | -5.6% | Vale | -3.9% | -6.3% |
| Glencore | 0.1% | -7.9% | Newmont Mining | -2.6% | -1.5% |
| Anglo American | 1.8% | -8.8% | Fortescue | -2.1% | -6.1% |
| Antofagasta | 1.7% | -9.5% | Teck Resources | -6.2% | -10.4% |
Rio Tinto (RIO LN) 6,234p, Mkt cap £107bn – $1.9bn investment in Kangwinan bauxite project
- Rio Tinto are investing $1.9bn in the development of the Kangwinan bauxite project in Queensland, Australia.
- The development is designed to support the long-term future of Rio’s Weipa operations for the supply of bauxite to international Rio’s own Australian alumina refineries.
- Rio Tinto alumina refineries:
- Yarwun Alumina Refinery (100%) Queensland, Australia),
- QAL ‘Queensland Alumina Limited’ (80% Rio, 20% Rusal) Queensland, Australia),
- Alumar Alumina (10% Rio, 90% South 32) Brazil,
- Vaudreuil Alumina (100%) Quebec, Canada.
- Kangwinan will replace bauxite production from the Andoom mine near Weipa and raise Weipa’s capacity to ~44mtpa from 38mtpa compensating for the wind down of the Gove mine in 2029.
- Rio Tinto is also acquiring the adjacent Aurukun Bauxite project from Glencore (70%) and Mitsubishi (30%) to support further growth in bauxite supply beyond 2050 using existing and planned infrastructure.
Iron ore: Rio agreed a multiyear supply deal with CMRG ‘China Mineral Resources Group’ yesterday covering sales from November 2026 to May 2028
- The resolution follows news in September that CMRG told some Chinese mills to hold off buying Pilbara Blend as during their negotiations.
- BHP previously agreed a supply deal to run for a year to June 2027 including greater use of yuan pricing.
- Kumba (Anglo) also signed a long-term deal with CMRG running from April 2026 to March 2027.
- Fortescue warned this week that sales restrictions during its own CMRG talks could weigh on full-year earnings.
Conclusion: Rio Tinto appears focussed on supporting further expansion of its bulk materials business.
It will be interesting to see if China has been waiting to finalise negotiations for iron ore before providing more stimulus in the form of new infrastructure construction.
Iron ore prices have fallen through the negotiation process to ~US$90/t. It seems amazing that China has taken so long to structure its iron ore buying to better negotiate pricing.
Sun Peak Metals (PEAK CN) C$0.36, Mkt Cap C$59m – Drilling underway in Saudi Arabia
- Sun Peak Metals reports the start of its latest drilling programme at the wholly-owned Safra copper/zinc/gold/silver project in Saudi Arabia.
- The planned 3,000m programme follows up the initial drilling in May which included an intersection of “39.0 meters grading 1.38% copper and 0.84% zinc” in hole SAF26DD008 and subsequent induced polarisation (IP) geophysical results which “outlined encouraging chargeability anomalies at Safra Main, Safra East and Safra North”.
- The 93 km2 project, which targets volcanogenic massive sulphide (VMS) mineralisation is located in the eastern part of the Arabian Shield “approximately 185 kilometers northeast of Medina”.
- Seven of the ten holes drilled in the earlier campaign “at Safra Main intersected mineralization”.
- “Following Safra, a maiden drill program is planned at Al Miyah, targeting the Hishashat VMS target, supported by surface copper, zinc, gold and silver mineralization and coincident electromagnetic and gravity anomalies, as well as the Al Miyah Main VMS and Hilux gold targets”.
- CEO, Greg Davis, said that following the recently completed financing, Sun Peak Metals is “well positioned to advance our growing portfolio in Saudi Arabia, with the goal of discovering and developing multiple world-class deposits”.
- He said that Sun Peak Metals’ “experienced team and established operating platform allow us to explore and drill quickly and cost-effectively, beginning with Safra and followed by Al Miyah, while advancing additional priority targets toward drilling in early 2027”.
Conclusion: The next phase of drilling has started at Safra in Saudi Arabia and will then move on to other projects including Hishashat, the Al Miyah Main VMS and Hilux gold targets.
SP Angel – No.1 for Precious Metals: LSEG StarMine Award for Most Accurate Forecasting in Reuters Polls Q1 2026
No.1 for Precious Metals: Q1 2026
No.1 for Precious Metals: CY 2025
No.1 in Precious Metals: Q1 2025
No.1 in Precious Metals: CY 2024
No.2 in Base Metals: CY 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
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
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
SP Angel Corporate Finance LLP is authorised and regulated by the Financial Conduct Authority and is a Member of the London Stock Exchange
