April sales reports from China\u2019s BYD, which shifted more than 313,000 units in a 50% year-on-year and 3% month-on-month lift, are giving hope China\u2019s maudlin EV sector is returning to serious growth.<\/p>\n
That is bullish for lithium producers, who saw prices tumble across the back end of 2023 and have just come out of what is likely to be their roughest quarter of the downward cycle after prices for hard rock lithium concentrate fell to US$850\/t in January.<\/p>\n
They\u2019re back up to US$1215\/t according to Fastmarkets, with chemical prices also tiptoeing higher last month.<\/p>\n
Spot prices were little changed late last week thanks to a public holiday in China.<\/p>\n
But word that Chinese authorities are again subsidising EV and hybrid vehicle sales has been treated positively by the battery metals sector.<\/p>\n
\u201cBYD and a host of other Chinese EV makers posted higher sales and
\ndeliveries in April, raising hopes of stronger demand,\u201d ANZ Research\u2019s Madeline Dunk, Brian Martin and Daniel Hynes said in a note this morning.<\/p>\n
\u201cThis comes as they responded to overcapacity in the industry with rounds of price reductions.<\/p>\n
\u201cThis could be aided further by government support. Beijing announced it will offer consumers replacing cars with electric or hybrid vehicles up to the equivalent of nearly USD1400.\u201d<\/p>\n
It has gone hand in hand with rising copper prices, lifting on Friday as US payroll growth slowed from 315,000 in March to 175,000 in April and unemployment lifted 0.1% to 3.9%.<\/p>\n
That saw the US dollar slide, dragging up demand for metals like copper and gold.<\/p>\n
ANZ\u2019s Dunk, Martin and Hynes, said growth in commodity demand was also increasingly coming from markets linked to renewables and EVs.<\/p>\n
\u201cExpectations that global supply (of copper) will struggle to meet growing demand from clean energy sectors has seen prices rally strongly. This has been aided by better-than-expected economic data from China,\u201d they wrote.<\/p>\n
\u201cFirst quarter GDP growth rose to 1.6% q\/q, suggesting a significant gain in growth momentum.<\/p>\n
\u201cHowever, the composition of growth continues to shift in favour of commodity demand. New power generating capacity continues to be dominated by renewable energy.<\/p>\n
\u201cThe electric vehicle (EV) sector saw a strong rebound after a weak start to the year. Overall, the green economy has become China\u2019s biggest growth driver for demand of some commodities, such as metals.\u201d<\/p>\n
\u00a0<\/p>\n
It was an indifferent day for the gold sector as bullion producers continue to look for ways to rerate and catch up to a lift in prices.<\/p>\n
A couple things have hung over gold miners, who haven\u2019t necessarily been bought with the same enthusiasm as gold bars themselves.<\/p>\n
Firstly, there\u2019s the question of costs. While prices have exploded since the Hamas invasion of Israel on October 7, gold miners have historically chewed up margins by letting their costs run out of control.<\/p>\n
Secondly, a number of gold miners are sitting with a lack of expansion options, something that could take M&A to fix.<\/p>\n
Westgold Resources (ASX:WGX)<\/a><\/strong> is one that has turned to M&A for growth, announcing a $2.2 billion merger to combine with TSX-listed gold producer Karora Resources, owner of the Beta Hunt mine in WA\u2019s Kambalda gold district.<\/p>\n A major turnaround story last year, despite the rising gold price Westgold is up a spare 1% YTD after shutting its underperforming Paddy\u2019s Flat mine. Along with wet weather, that forced WGX to revise its 2024 guidance from 245,000-265,000oz at all in sustaining costs of $1800-2000\/oz to 220,000-230,000oz at $2100-2300\/oz.<\/p>\n It would have been hoping on a sugar hit today from some high grade drill results at the Great Fingall project, a 45,000ozpa underground development near Cue where first ore is anticipated later this year.<\/p>\n A hit of 3.03m at a sparkly 547g\/t from 204.87m at the Fingall Flats area has been described as an \u2018early mining opportunity\u2019, part of a collection of new drill results including 17.05m at 8.88g\/t and 6m at 22.13g\/t.<\/p>\n Targeting high grade structures left behind by the old timers, grade control is expected to take place with access to the area planned for this quarter.<\/p>\n \u00a0<\/p>\n It didn\u2019t move the market much, but here\u2019s some visible gold from the Fingall Flats drilling at Westgold\u2019s Great Fingall project. Pic: WGX<\/p>\n \u00a0<\/p>\n Meanwhile, Regis Resources (ASX:RRL)<\/a><\/strong> was also up around 1% after approving the development of two new underground mines at its Duketon operations in WA. The longevity of Duketon has come to the fore after a major blowout in capex for the McPhillamy\u2019s project in New South Wales, it\u2019s key development asset.<\/p>\n The new Garden Well Main and Rosemount Stage 3 mines are expected to add 100,000-120,000ozpa from FY27, though they come at low grades for an underground orebody.<\/p>\n Garden Well Main is expected to mine 60-70,000ozpa at costs of $2050-2150\/oz, with $75-95m of capex required to develop the project. While it has 91,000oz of gold reserves at 2.4g\/t, the mine plan is reliant on mineral resources and exploration targets, with the deposit hosting a larger inventory of 3.2Mt at 2.8g\/t for 295,000oz.<\/p>\n Meanwhile, $45-55m will be required to be spent to develop Rosemont Stage 3, producing 40,000-50,000ozpa at $2400-2500\/oz. Its mining inventory of 1.7Mt at 2.8g\/t for 157,000oz contains a probable ore reserve of 490,000t at 2.6g\/t for 41,000oz.<\/p>\n Both mines are expected to deliver stoping ore from Q1 FY26.<\/p>\n Regis was up at the close, but not everyone loved the news.<\/p>\n The biggest trick miners play is classifying sustaining\/life extension as \u201cgrowth\u201d..<\/p>\n Few takeaways: \u2014 Respeculator (@respeculator) May 5, 2024<\/a><\/p>\n\n \u00a0<\/p>\n The materials sector ended the day\u2019s trade up 0.9%, with Fortescue (ASX:FMG)<\/strong><\/a> and Mineral Resources (ASX:MIN)<\/a><\/strong> among the large cap standouts.<\/p>\n In other market news Sierra Rutile (ASX:SRX)<\/a> <\/strong>continues to feel the pinch at its Area 1 operations in Sierra Leone, where it recently stood down workers in protest at a return to tax arrangements it said would have made the rutile mine uneconomic.<\/p>\n The Government of Sierra Leone has now issued a notice telling SRX to resume operations by May 31, alleging a breach of the country\u2019s mining act.<\/p>\n \u201cFor clarity, Sierra Rutile does not agree that it has committed the breach alleged by the GoSL in the notice,\u201d SRX said in a statement.<\/p>\n \u201cSierra Rutile is considering its position and its response to the direction from the GoSL. In the meantime, Sierra Rutile will continue to seek to engage with the GoSL to resolve the issue in conjunction with the broader overall negotiations with the GoSL.\u201d<\/p>\n \u00a0<\/p>\n Fenix Resources (ASX:FEX)<\/strong><\/a> \u00a0(iron ore) +5.2%<\/p>\n Energy Resources of Australia (ASX:ERA)<\/strong><\/a> (uranium) +3.9%<\/p>\n Nickel Industries (ASX:NIC)<\/strong><\/a> \u00a0(nickel) +3.7%<\/p>\n Sandfire Resources (ASX:SFR)<\/strong><\/a> (copper) +2.9%<\/p>\n \u00a0<\/p>\n Syrah Resources (ASX:SYR)<\/strong><\/a> (graphite) -4.9%<\/p>\n West African Resources (ASX:WAF)<\/strong><\/a> (gold) -2.5%<\/p>\n Metals Acquisition (ASX:MAC)<\/strong><\/a> (copper) -2.1%<\/p>\n 29Metals (ASX:29M)<\/strong><\/a> (copper) -2.1%<\/p>\n \u00a0<\/p>\n <\/span>\u00a0<\/p>\n <\/span>\u00a0 The post Monsters of Rock: Chinese Government support and \u2018price war\u2019 sends EV sales racing back in April<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\n1. Duketon\u2019s best days are well & truly behind it
\n2. With (1) and recent McPhil news RRL is in a
\n3. Accretive across range of gold px? Show us
\n4. My breakevens >A$3k\/oz$RRL.AX<\/a> pic.twitter.com\/DjwwMVpSaf<\/a><\/p>\nMarket closes up<\/h2>\n
Today\u2019s Best Miners <\/strong><\/strong><\/h2>\n
Today\u2019s Worst Miners <\/strong><\/strong><\/h2>\n
Monstars share prices today<\/h2>\n\n
ASX 300 Metals and Minings Index today<\/h2>\n\n
\n<\/span><\/p>\n