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News.com.au
03-06-2025
- Business
- News.com.au
Up, Up, Down, Down: Uranium lit up in May as gold paused to catch its breath
Uranium leads the winners as commodities wait for direction in May Gold comes off record highs, as volatile US trade policy dominates sentiment Iron ore, lithium and nickel all struggle WINNERS Uranium (Numerco) Price: US$72/lb % Change: +6.05% Uranium returned to the limelight off the back of a string of executive orders from Donald Trump designed to increase nuclear power capacity in the USA fourfold by 2060. Part of the plan is to ramp up domestic mining and enrichment capabilities, cutting reliance on a supply chain dominated by Russia and nations friendly to Putin like Kazakhstan and Uzbekistan. That saw a small lift in spot prices after months of inactivity and a large bump for uranium equities after a year long sell-off. UP Wood Mackenzie says the small modular reactor pipeline has grown 42% in the past quarter to 47GW, with data centres now at a 39% share of the unrisked demand pipeline. Sprott says with more clarity over US Government policy, yellowcake contracting has resumed, with as much as 67% of the market out to 2045 uncovered by utilities. DOWN Incentive prices remain too low for most new developers, who want to see prices of US$100/lb or above before pushing the button on capital intensive new uranium projects. The Global X Uranium ETF is sitting on a 9.89% month gain, but it remains 6.45% YTD with investors yet to really set up their stall behind U3O8 miners. Copper Price: US$9498/t % Change: +4.09% Copper mines continue to be a long term investment goal for major miners, with M&A heating up even as prices remain rangebound. Johannesburg-headquartered Harmony Gold's US$1.03bn deal to buy MAC Copper (ASX:MAC), a $160m deal for Xanadu Mines (ASX:XAM) and London-listed Central Asia Metals' $185m purchase of New World Resources (ASX:NWC) show how keen miners globally remain to snap up copper projects. UP An underground shutdown of the Kakula mine in the DRC due to seismicity and flooding has helped support copper prices on the supply side. Ivanhoe and Zijin's phase 1 and 2 concentrators are running at half capacity on surface stockpiles, though the phase 3 concentrator, fed from the operating Kamoa mine, remains fully operational. Aluminium and steel tariffs levied by the Don this past week have lifted expectations of copper tariffs that could dramatically increase prices in the US, Benchmark analysts say. The CME-LME arbitrage lifted 38% over the weekend. DOWN Copper was projected to be in a 327,000t surplus for the first three months of 2025, according to the International Copper Study Group. First Quantum Minerals will be able to sell around 121,000t of copper in concentrate from its suspended Cobre Panama mine to fund maintenance activities on the site. The 350,000tpa operation's early closure due to political opposition helped stir a sudden tightening of the copper market in late 2023 and early 2024. Coal (Newcastle 6000 kcal) Price: US$103.30/t % Change: +5.95% Coal's been in a tough place for a while now, with rising mining costs seeing a number of equities in the doghouse as strong supply hurts pricing. Glencore has given some support to thermal coal prices, by trimming output from its Cerrejon operation in Colombia. China has been ramping up domestic production and trimming imports in a hit for thermal coal producers, while met coal prices are also at cyclical lows (albeit at historically strong levels of around US$186/t) on weak steel demand in China. The caveat there is that only a c0uple BHP mines in Queensland actually pull in that premium price point. For PCI and semi-soft coking coal miners the world is a bit tough right now. UP Prices are miles into the cost curve for both thermal and coking coal, suggesting prices will have to rise with both market demand and green tape shackling investment in new sources of supply. With a number of miners struggling, calls are set to grow louder for the end of a coal royalty regime that pulled in billions of additional dollars for the Queensland Government following the Russian invasion of Ukraine and subsequent coal boom. The LNP Government says no for now ... we'll see. DOWN Westpac says the met coal market will remain in surplus until 2027, with a number of miners now struggling to make ends meet. Thermal coal is also in strong supply heading into the typically muted demand market of the northern hemisphere's shoulder season. Rare Earths (NdPr Oxide) Price: US$60.78/kg % Change: +6.66% Rare earths prices are moving back in a positive direction (note: the chart below contains prices which exclude China's value added tax). Shanghai Metals Market analysts think prices will fluctuate upwards across 2025 as the market moves into balance and new sources of demand, like humanoid robots, emerge. Away from prices, rare earth stocks have received strong support from the policies of US President Donald Trump, with miners increasingly hopeful of seeing a ramp up in demand as America aims to restore its mineral and energy security. The race for the world's top deposits is on in earnest, with China's Shenghe Resources signing a deal to acquire Peak Rare Earths (ASX:PEK) and its Ngualla project in Tanzania in a $150.5m takeover. UP Shanghai Metals Market experts think praseodymium and neodymium demand will increase 5.4% this year despite falling magnet metal exports, related to controls placed by China on rare earth materials after Trump's tariffs were introduced. China's access to imported rare earth metal ores is set to drop from 55,000t in 2024 to 43,000t in 2025 as local supply chain buildout by MP Materials reduces supply to China from its Mountain Pass mine in California. DOWN Despite lifting revenue by around a quarter, US producer MP Materials sunk from a US$16.5m profit in the first quarter of 2024 to a US$22.6m loss in the first quarter of 2025. A recent rise in NdPr oxide prices was led by restocking from Chinese magnet producers, which could make the recent price run short-lived. LOSERS Gold Price: US$3277.55/oz % Change: -0.76% After months of gains driven by economic uncertainty, a trade war, actual wars and the unpredictability of Donald Trump, gold hit the pause button in May. An apparent thawing in relations between the US and China, including a pause in the extraordinary 145% tariff regime levied on Beijing by Washington (reciprocated by a vengeful Xi Jinping) took prices below US$3200/oz for the first time since Liberation Day changed the game for gold miners. Investors flocked back for safe haven as the month progressed however, with a late dip below US$3300/oz coming as US annual inflation came in at a five month low of 2.1% late last month, with core inflation of 2.5% slightly below expectations. UP M&A continues to rage in the gold market as ASX mid-tiers look to grow, exemplified by Genesis Minerals' (ASX:GMD) $250m cash splash on Focus Minerals' (ASX:FML) 4Moz Laverton gold project. Liquidity is starting to get very strong for gold juniors. Warriedar Resources (ASX:WA8) raised $17m in a recent placement while Golden Horse Minerals (ASX:GHM) pulled in $15m. All this just to drill – a sign of the times given the modest nature of the two WA gold explorers. DOWN While gold bulls have been waiting for a big move into gold ETFs to add to demand from China and central banks that has stirred the record price run, US retail investors have been shifting to Bitcoin ETFs instead. An auction of one of Australia's largest gold mines has reportedly been called off after EMR Capital and Indonesia's Golden Energy and Resources were reportedly unable to find an acceptable bidder for the Ravenswood mine in Queensland. READ Nickel Price: US$15,237/t % Change: -1.17% Not much to write home about for nickel this month, which remains in a holding pattern after Indonesian supply growth surged well ahead of demand. UP The head of Indonesia's nickel mining association APNI has warned miners they will need to clean up their operations to remain players in the global nickel industry after a string of media reports criticising the sector's ESG credentials. A royalty rise for Indonesia's nickel mines could lead to some mine closures and layoffs, which could support prices with a number of producers in the Southeast Asian country already losing cash. DOWN Bloomberg says an Indonesian HPAL plant that killed two workers in a landslide in March has restarted operations. A 198,000t surplus, around 5% of mined supply, is expected for the nickel market in 2025 as per the International Nickel Study Group. READ Monsters of Rock: The West is talking the talk on critical metals, but it ain't walking the walk Iron ore (SGX Futures) Price: US$93.63/t % Change: -2.78% Iron ore tumbled steeply at the end of May at the China Iron and Steel Association warned in its monthly report that steel markets are oversupplied ahead of a hot and wet season in China when construction activity normally falls. MySteel reported last week that Chinese mills were keeping less stock on hand ahead of the low period, hitting a YTD low of 12.1Mt. It has come amid broader discontent in Australia over the future of the Aussie cash cow, with Pilbara iron ore miner Andrew Forrest warning competition from new high grade African iron ore sources means WA and Australia needs to invest in 'green iron' making capacity at home. Whether that talk can be converted into action remains anyone's guess. The iron ore trade to China remains a lucrative one, for now. UP Despite fears over the impact of the US-China trade war, steel exports from China continue to rise, up 13.42% YoY in April to over 10Mt. It's the second 10Mt month in a row, with exports picking up the slack of weak demand from the Chinese property sector. Port iron ore stocks are at their lowest level in 15 months in China, down for a fourth straight week to end May on 138.7Mt. DOWN Chinese rebar prices hit an 8-year low in early June. The key steel product is especially exposed to property and construction markets. Concerns are growing over the impact of high grade exports from West Africa on Australian iron ore demand. With ore grades declining and weak steel profits pushing mills to purchase less pure ores, Fastmarkets has introduced a 61% Fe iron ore index, down on the traditional 62% benchmark. Lithium (Fastmarkets Carbonate CIF China, Japan and Korea) Price: US$8150/t % Change: -6.32% Lithium prices crumbled to a new four year low, with spodumene concentrate particularly hard hit. The benchmark price for the product delivered to the Chinese market by WA hard rock miners has sunk to US$615/t, but the actual sale price of Aussie product is likely lower still, given few shipments meet the 6% Li2O grade set out in the benchmark price. As prices rip lower, the question is how soon before supply really starts to get taken out of the battery supply chain? UP With prices plunging even further, the bottom must be near ... surely? Rio Tinto (ASX:RIO) signalled ita confidence in the long-term outlook for lithium, announcing big investments into brine assets in Chile. DOWN Albemarle's woes have been compounded, with the world's largest lithium producer falling off the Fortune 500 list on the back of a sustained downturn in prices. SQM's latest accounts showed a US$137.5m quarterly profit, well below the US$171.2m tipped by analysts. But the boss of the Chilean miner, Ricardo Ramos, said he thought a "reasonable price environment" would return next year. OTHER METALS Prices correct as of May 30, 2025. Silver Price: US$33.08/oz %: +2.64% Tin Price: US$30,406/t %: -3.00% Zinc Price: US$2620/t %: -11.26% Cobalt Price: $US33,700/t %: 0.00% Aluminium Price: $2444/t %: +1.85% Lead Price: $1958/t %: +0.03% Graphite Price: US$420/t %: + 1.20%
Herald Sun
05-05-2025
- Business
- Herald Sun
Which metals won in April?
Gold and uranium were the only winners among our eight key Up, Up, Down, Down commodities after hitting new highs in April Coal, lithium, nickel hit multi-year lows Iron ore, copper rocked by tariffs, but rare earths capture imagination in spite of price drop WINNERS Gold Price: US$3302.50/oz % Change: +6.00% There's nothing that gets the punters going like gold right now. Futures over in the States charged as high as US$3500/oz after Donald Trump's tariffs on all and sundry sent markets into a tailspin and investors chased sexier forms of safe haven. US bonds, the investing version of staying in on Friday night to watch reruns of Grand Designs, went haywire and the US dollar dropped hard, sending money flocking into gold. That subsided somewhat when the Trump Administration pulled a reverse ferret, sending bullion falling into the end of the month. No worries for gold producers, who are tracking to pull in stonking profits this year with spot margins sitting at upwards of $3000/oz plus or minus some hedging and additional royalty payments. Investment demand for gold rose 170% year on year in the March quarter, with gold demand hitting a level for a March quarter not seen in nine years. ETF inflow remained strong in April, with Chinese inflows immediately after Liberation Day exceeding flows into Chinese ETFs through all of January-March. DOWN Gold prices dipped after hitting their all-time high, coming under pressure as Donald Trump's stance on China trade tariffs softened. Chinese gold sales heading into the Labour Day public holiday week also put pressure on the gold price, with around 1Moz of bullion liquidated from Shanghai futures and gold exchange holdings ahead of the break. READ Still Going Strong: Gold demand hits a NINE-year March quarter high Gold threatened a complete breakout before Trump's softening on tariffs shackled prices. Pic: LBMA Uranium (Numerco) Price: US$67.50/lb % Change: +5.05% Spot uranium prices finally took a turn back for the better, climbing sharply at the end of April and after month's end. They're now at US$70/lb, heading back in the direction of contract based term prices which are hovering around US$80/lb and more accurately reflect prices being accepted by utilities. A major trigger was a disappointing March quarter for the world's largest producer Kazatomprom. The street is growing less certain of its ability to hit guidance this year after a 14% QoQ drop in yellowcake output from its Kazakh mines. UP Cameco's Tim Gitzel told analysts on an investor call that as much as 70% of utility requirements for the next two decades remains uncontracted, suggesting utilities will need to return to the market in a big way. Deep Yellow (ASX:DYL) delayed FID again on its Tumas mine in Namibia, suggesting much higher prices were needed to incentivise new supply, prolonging emerging deficits. DOWN It matters little on the global scale, but the strong election win by Anthony Albanese's Labor Party over Peter Dutton's Liberal-National Coalition will chill momentum from the nuclear and uranium lobbies in Australia. Chinese scientists have built a thorium reactor out in the Gobi Desert. Could it disrupt the uranium market and nuclear fission sector? It's way to early to even consider it at this stage, but it's also hard to find uranium bears, so this is our second 'down' for this month. READ Uranium price rebound is overdue, and these African projects are getting ready Uranium spot prices have finally picked up in late April. Pic: Numerco LOSERS Coal (Newcastle 6000 kcal) Price: US$97.50/t % Change: -5.75% Coal was put under pressure in April, with Newcastle coal futures hitting a four year low of US$93.70/t on April 23, according to Trading Economics. A ramp up in Chinese domestic coal output and mild Asian winter have combined to reduce demand for seaborne coal at a time of strong supply. Met coal prices on the other hand rose at the end of the month after a fire at the Moranbah North mine in Queensland and solid steel production numbers out of China and India. Futures surged as high as US$198/t in early April and are now at US$185/t, having crashed in the US$160s in March. UP Glencore has crystallised plans to cut production at Cerrejon in Colombia by up to 10Mt in 2025, a move which could thrust the conglomerate into conflict with local unions. Strong quarterly and half year results from New Hope Corp (ASX:NHC), Whitehaven Coal (ASX:WHC) and Yancoal Australia (ASX:YAL) showed many Australian miners could still make cash with the right cost base and product mix. DOWN Around 10-15% of the coal market is now lossmaking, according to Commbank's Vivek Dhar. That means prices could rebound, but high inventories and weaker Chinese demand will likely keep prices in check without mine closures. READ Counter Cycle: 'Sex and violence' in the US could turn into gold for resources stocks Coal prices continue to look weak. Pic: Trading Economics Rare Earths (NdPr Oxide) Price: US$56.36/kg % Change: -7.75% The fortunes of the rare earths market and rare earths stocks diverged as Trade War mania sent critical minerals explorers soaring at the same time prices were coming off the boil in China. One big question now is how relevant pricing indices will be if Western governments can subsidise supply chains outside the rare earths heartland into existence. Lynas (ASX:LYC) is looking to begin producing dysprosium and terbium later this quarter, two heavy rare earths recently placed under export controls by the Chinese Government. It's looking for western buyers, delivering the promise of a supply chain for those metals in which the Chinese price is not relevant. UP Analysts are beginning to project higher consumption for rare earth magnets as tech companies begin to commercialise humanoid robots in China, the US and elsewhere, potentially doubling the size of future rare earths demand. Executive orders from Donald Trump's US Administration, and rumours about a planned rare earths stockpile, have sent rare earth stocks on a tear. Lynas is up ~30% YTD and smaller rare earth stocks are also catching tailwinds. DOWN Rare earth demand in the key market of China remains subdued, with the Shanghai Metals Market reporting the market is heading into an 'off-season' for purchases. Some market participants are concerned critical minerals stockpiles like the one proposed by Australia could bring uneconomic projects to market, subduing or distorting market pricing in the years ahead. READ The US wants to stockpile rare earths, and these miners are running hot as a result While rare earths stocks have been charging, Chinese market prices have been falling. Pic: SMM Copper Price: US$9125/t % Change: -6.02% Copper fell at the whim of US President Donald Trump, with the initial surge from the fear tariffs could be imposed on the metal drowned out by the magnitude of the economic damage wrought by reciprocal tariffs. The market remains delicately balanced, with Chinese buying of inventory stock and creeping backwardation showing there remains tightness in the physical market. UP Copper supply remains a delicate thing, with a death and subsequent outage at BHP's Antamina JV in Peru leading to a late month recovery in prices. The threat of copper specific tariffs remains live, with US prices still priced far above the LME benchmarks. DOWN The International Copper Study Group expects to see surpluses of 289,000 tonnes for 2025 and 209,000 tonnes for 2026. The ICSG has also revised down its copper usage growth rate for 2025 from 2.7% to 2.4% on account of the trade war, slowing to 1.8% next year. READ Kristie Batten: As copper market tightens, Hillgrove is looking to grow Copper took a hit from Trump's tariff policies. Pic: LME Nickel Price: US$15,418/t % Change: -3.14% Three month LME nickel prices sagged as low as US$14,030/t during the month of April, a low point stretching back to August 2020. That came as Trump's tariffs roiled markets and a surplus driven by a surge in Indonesian nickel supply, much of it bankrolled by China, kept supply-demand dynamics in check. UP Indonesia has lifted taxes on nickel miners, something which could chill output from the island nation, though the 14-19% price linked royalties will be far higher than rates for refined products like ferronickel and matte. ASX bellwether Nickel Industries (ASX:NIC) delivered a strong set of quarterly results, showing it remains profitable even with subdued prices. DOWN The nickel surplus will rise from 179,000t in 2024 to 198,000t in 2025, according to the International Nickel Study Group. Supply is expected to rise from 3.363Mt in 2023 and 3.526Mt in 2024 to a forecast 3.735Mt in 2025. Demand will rise as well, though alternative battery chemistries like lithium-iron-phosphate mean growth from the EV market is slower than previously predicted. READ High Voltage: Miners welcome Aussie $1.2bn critical minerals stockpile plan Nickel tumbled as low as US$14,084/t before recuperating. Pic: LME Iron ore (SGX Futures) Price: US$96.31/t % Change: -4.63% Iron ore largely weathered the storm when it comes to tariffs, and fears they would kill the export market for Chinese steel. That market has propped up the sector, where mills have largely struggled to return profits in the past couple years. Despite shrinking margins steel production for April is likely to be solid, with MySteel reporting utilisation rates across the blast furnaces it surveys at 92%. Rio Tinto remains bullish on the outlook for Aussie iron ore, pledging to invest upwards of US$13bn on replacement mines in the next three years. UP China surprise to the upside with a 5.4% lift in GDP in the March quarter. Iron ore bosses remain bullish on the downside limits for iron ore, with MinRes CFO last month saying there was support around US$90/t as it looks to get production up and costs into the US$40s/t range at its stuttering Onslow Iron project. DOWN Andrew Forrest delivered a warning to Australia in a speech suggesting high grade African iron ore from the Simandou mine could hurt the Aussie market. It all came as part of a pitch for green iron funding, if you want to be cynical (Forrest's Fortescue owns its own African project at Belinga in Gabon). Marginal producers are having to reconsider their investment strategies, with Grange Resources (ASX:GRR) withdrawing a proposal to amend its State Environmental Approval for the Southdown magnetite project near Albany in WA. READ Bulk Buys: Majors stay bullish on bulks, even as fears circle Iron ore won't buckle under tariff pressure, yet. Pic: SGX Lithium (Fastmarkets Carbonate CIF China, Japan and Korea) Price: US$8700/t % Change: -6.95% Lithium prices continue to struggle under the weight of a supply rush that took spot pricing from over US$80,000/t to under US$10,000/t for key chemicals between 2022 and 2024. Fastmarkets lithium carbonate pricing in China, Japan and Korea has recently fallen to its lowest level in four years. With so much pressure on producers, it can only be a matter of time before supply discipline really starts to take hold. UP Albemarle boss J. Kent Masters estimated some 40% of lithium producers could be lossmaking. Generally when you're that far into the cost curve something has to give. EV sales growth is stronger than some naysayers would have you believe, clocking in at around 30% in the March quarter. DOWN CATL unveiled the second generation of its sodium ion batteries, a product its founder Robin Zeng thinks could eventually replace half of all LFP car batteries Supply cuts could prove sticky if low cost operations in the US, which could see subsidies and support from the Trump Admin, and Argentina, led by Rio Tinto, are brought online despite low prices. READ Lithium could turn quickly, and Argentina is the place to be OTHER METALS Prices correct as of April 30, 2025. Silver Price: US$32.23/oz %: -5.37% Tin Price: US$31,348/t %: -14.45% Zinc Price: US$2952.50/t %: +3.52% Cobalt Price: $US33,700/t %: -0.78% Aluminium Price: $2399.50/t %: +5.27% Lead Price: $1957.50/t %: -2.70% Graphite Price: US$415/t %: -3.49% Originally published as Up, Up, Down, Down: Here's how the US-China trade war impacted commodities in April
