Commodity Calls: Week Ending 12 July 2024

Australians change their mind on nuclear energy, BHP suspends nickel mining operations, and Rio Tinto looks to acquire copper miners.

Join Global X each week for ‘Commodity Calls’ to explore all the recent signals and developments that occurred in the world of commodities.

Looking for more? Check out this week’s Market Moves and Thematic Spotlight.

Uranium


Bullish

  • A recent survey by Essential Research showed more than 52% of Australians are now supportive of nuclear power and only 31% were explicitly against it.1 These numbers are in stark contrast to a similar survey performed in 2011 which saw only 35% of Australians in support of the technology, and 62% against it.2

Bearish

  • Niger’s new government has withdrawn uranium exploration firm GoviEx’s mining rights.3 The Madaouela mine which GoviEx has operated on since 2007 will become public domain and COMIMA SA, a partly government owned Nigerian firm, will be set up to further develop the project.

Explore uranium with ATOM.

Transition Metals


Bullish

  • The US has approached Indonesia with a proposal for a multinational partnership to accelerate the development of sustainable critical metals supply chains.4 The potential collaboration would involve 14 countries and the European Union and offers an opportunity to improve environmental standards in Indonesia’s mineral sector.
  • Lithium miner, Liontown Resources, has agreed to supply Ford Motors with 150,000 dry metric tonnes of lithium spodumene concentrate each year for the next five years.5 The deal follows a similar contract signed by Liontown Resources with Tesla earlier in the year.

Bearish

  • Mining giant BHP has temporarily suspended nickel mining in Western Australia citing global oversupply and weakening demand from electric vehicles.6 Despite the grim outlook, BHP stated it will nonetheless invest ~US$300 million per annum into the project after closure to support any possible restart of WA Nickel if economically viable.7

Explore transition metals with GMTL.

Copper


Bullish

  • Rio Tinto is reportedly considering the acquisition of multiple copper firms including Canadian mining firm Teck Resources.8 The mining giant’s potential move follows BHP’s failed bid for Anglo American and is part of a global trend seeing firms scramble for copper exposure.

Bearish

  • Chinese copper smelters are preparing for a possible scrap copper supply squeeze as new regulations from Beijing kick in.9 The Fair Competition Review regulation, intended to level the playing field for smaller players, will forbid copper smelters from taking advantage of tax benefits without approval from the state council. Much of China’s copper scrap processing capacity relies on tax rebates from local governments.

Explore copper with WIRE.

 

Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at 16/07/2024. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.

Brokerage commissions will reduce returns.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalised investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.