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07 January 2019 07:14 AM
Overseas Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Dow Jones Industrial Average23,43322,686747.003.29-3.92
S&P 5002,5322,44884.003.43-3.84
NASDAQ6,7396,464275.004.26-3.31
FTSE 100 Index6,8376,693145.002.160.88
DAX 3010,76810,417351.003.37-0.19
CAC 40 Index4,7374,611126.002.72-1.58
Nikkei 225 (Japan)19,56220,015-453.00-2.26-9.76
HKSE25,62625,064562.002.24-1.68
SSE Composite Index2,5152,46451.002.05-3.49
S&P/TSX Composite Index14,42714,213214.001.50-2.49
NZ 508,7618,74417.000.20-0.07
US Volatility (Vix)21
Overseas Market Report

US sharemarkets posted solid gains on Friday in response to jobs data and comments from the Fed chair. Apple rose 4.3% and Boeing rose by 5.2%. The Dow Jones rose by 747 points or 3.3%. The S&P500 index was up by 3.4%. The Nasdaq index lifted by 275 points or 4.3%. Over the week the Dow rose by 2.3%, the S&P 500 lifted by 1.9% and the Nasdaq gained 2.3%

Global oil prices rose by near 2% on Friday on optimism about upcoming US-China trade talks. Investors were also encouraged by Chinese services data and US employment figures. Brent crude rose by US$1.11 or 2.0% to US$57.06 a barrel and the US Nymex price rose by US87 cents or 1.8% to US$47.96 a barrel. Over the week Brent rose by US$4.86 or 9.3% with Nymex up by US$2.63 or 5.8%.

Base metal prices rose by up to 3.2% on the London Metal Exchange with copper up the most. But tin fell by 0.1% while lead rose only by 0.9%. Over the week nickel rose by 3.2% but lead lost 5.6%.

The gold futures price fell by US$9.00 an ounce or 0.8% to $1,258.10 an ounce. The spot gold price was trading near US$1,285 an ounce in late US trade. Over the week gold rose by US$2.80 or 0.2%. Iron ore rose by US70 cents or 1.0% to US$73.45 a tonne. Over the week iron ore rose by US75 cents or 1.0%.

CommoditiesCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Oil Brent57.2757.060.210.37-7.13
Oil - West Texas crude48.2047.960.240.50-8.38
Gold Spot $/OZ1,285.001,285.000.100.012.96
Silver Spot $/OZ15.7015.700.000.097.52
Iron Ore71.7070.601.101.538.28
Thermal Coal Newcastle99.5099.60-0.10-0.10-3.26
Coking Coal FOB ECP AUS0.000.000.000.000.00
Aluminium ($US/t)1,8701,84425.001.37-5.21
Copper Mar-18 ($US/lb)2.642.64-0.80-0.30-4.28
Lead ($US/t)1,9381,92117.000.88-2.58
Nickel ($US/t)11,04210,796247.002.28-0.34
Zinc ($US/t)2,5102,45456.002.28-7.41
Tin ($US/t)19,57819,601-23.00-0.112.05
Uranium ($US/lb)29.0029.000.00-0.17-0.35
Australian Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
ASX All Ords5,7415,67764.001.13-0.29
S&P/ASX 2005,6835,61963.001.130.02
ASX 24 Futures5,623
Australian Market Report

Friday 4 January - close. The Australian share market has shrugged off some of its earlier losses but fears of a slowdown in China have continued to drag on the local bourse. The benchmark S&P/ASX200 index was down 14 points, or 0.25 per cent, to 5619.4 at 1615 AEDT on Friday, following a morning that saw it lower by more than one per cent. The broader All Ordinaries was down 17.6 points, or 0.31 per cent, to 5677.

Ashanti Headlines

Pensana Metals Ltd: (PM8.ASX, 1.6cps, m.cap A$19.2m with 1,202.2m SOI, Cash $4.6m, Rare Earths explorer)

  • The outlook for electric vehicle (EV) metals is strong. Demand for rare earth's will benefit as the switch from the internal combustion engine to the EV plays which will be the biggest energy transformation in history
  • We continue to position ourselves with stocks exposed to rare earth's such as PM8 which we believe offers excellent leverage to the thematic
  • Increasingly what many of these EVs have in common is that they use highly efficient permanent magnet motors. Which require NdPr. Every vehicle needs around 0.7 to 1.2 kg of NdPr oxide.
  • According to Adamas Intelligence demand for NdPr is going to outstrip supply with the next five years, possibly as early as 2020.
  • At present over 87% of NdPr is supplied by mines in China to the magnet manufacturers. A further 9% comes from Lynas Corporation ASX:LYC which is causing many car manufacturers and magnet producers to start to look at where the new supply of NdPr is going to come from.
  • In our opinion, PM8 has the potential to become the second major NdPr producer outside China for the following reasons:
    • The Longonjo deposit is going to get much bigger: Executive Director Dave Hammond commented:  With just over half of the drill results received to date it’s clear that much of the weathered blanket covering the 3.8 square kilometre carbonatite is mineralised and that we are already looking at the potential for a very substantial expansion of the maiden Mineral Resource estimate.”
    • Longonjo has some of the highest grades of any NdPr project worldwide: Drill results to date have reported thick intersections up to 65 metres from surface and several exceeding 5% REO and 1% NdPr. In some areas the grades reach 8% REO and 1.98% NdPr.
    • Their customers will be Chinese: They don’t want PM8 to build a major rare earths refinery. They already have their own. This means that the capital cost is orders of magnitude lower. Floating a concentrate is one thing. Building a complex refinery is another.
    • Metallurgical testwork results indicate that a high grade concentrate can be produced. The advantage of these higher grades is that mineralisation can be selectively mined for treatment. Early metallurgical testwork results have been encouraging. Testwork is now focusing on producing a high grade concentrate.
    • Longonjo is adjacent to one of Africa’s major rail lines linking the project to the Atlantic Port of Lobito. Getting concentrate onto transport is crucial to the economics for any project selling concentrates. Longonjo has a huge economic advantage being located just 4 kilometres from the Longonjo loading facility on the Chinese built Central Benguela rail line.
    • Customers comfortable with country risk. China has invested over US$20 billion into Angola. When the customers are comfortable with the country risk it takes us a long way down the road of de-risking the project when the time comes for financing
  • Please contact the desk on +61 8 6169 2668 or your adviser should you wish to discuss further

Have a question? admin@ashanticapital.com.au

ERA Communications