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15 January 2019 07:37 AM
Overseas Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Dow Jones Industrial Average23,91023,996-86.00-0.36-0.79
S&P 5002,5832,596-14.00-0.53-0.67
NASDAQ6,9066,971-66.00-0.94-0.07
FTSE 100 Index6,8556,918-63.00-0.910.14
DAX 3010,85610,887-32.00-0.29-0.09
CAC 40 Index4,7634,781-19.00-0.39-1.87
Nikkei 225 (Japan)20,36020,164196.000.97-4.75
HKSE26,29826,667-369.00-1.380.78
SSE Composite Index2,5362,554-18.00-0.71-2.24
S&P/TSX Composite Index14,97614,93936.000.242.61
NZ 508,9708,9692.000.022.84
US Volatility (Vix)19
Overseas Market Report

US sharemarkets were lower on Monday. Chinese economic data was weaker-than-expected. And investors await the UK Brexit vote to be held on Tuesday. Shares in Citigroup rose by 3.95% after a drop in expenses offset weaker quarterly revenue and supported profits in the quarter. Shares in the biggest power utility in the US, PG&E Corp, plunged by 52.4% after it said it was preparing to file for Chapter 11 bankruptcy for all of its businesses. At the close, the Dow Jones was down by 86 points or 0.4%, after trading in a range of almost 200 points. The S&P500 index was down 0.5%. The Nasdaq index was lower by 66 points or 0.9%.

Global oil prices fell by around 2.0% on Monday in response to the weak Chinese trade figures. If a weaker Chinese economy drags down global growth it would result in weaker oil demand. According to Reuters, Saudi Arabian Energy Minister Al-Falih said on Sunday "the oil market was 'on the right track' and there was no need for an extraordinary OPEC meeting before its next planned gathering in April". Brent crude fell by US$1.49 or 2.5% to US$58.99 a barrel and the US Nymex price fell by US$1.08 or 2.1% to US$50.51 a barrel.

Base metal prices fell by up to 1.1% on the London Metal Exchange with lead down the most. But tin rose by 1.2%.

The gold futures price rose by US$1.80 an ounce or 0.1% to $1,291.30 an ounce. The spot gold price was trading near US$1,291 an ounce in late US trade. Iron ore rose by US10 cents or 0.1% to US$74.80 a tonne.

CommoditiesCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Oil Brent58.9960.48-1.49-2.46-2.14
Oil - West Texas crude50.7350.510.220.44-0.92
Gold Spot $/OZ1,292.001,292.000.300.024.32
Silver Spot $/OZ15.6015.700.00-0.027.39
Iron Ore72.8072.800.000.007.95
Thermal Coal Newcastle97.4098.00-0.70-0.71-4.84
Coking Coal FOB ECP AUS0.000.000.000.000.00
Aluminium ($US/t)1,7991,813-14.00-0.77-5.73
Copper Mar-18 ($US/lb)2.632.63-0.40-0.13-4.67
Lead ($US/t)1,9681,989-21.00-1.071.35
Nickel ($US/t)11,35411,414-60.00-0.523.13
Zinc ($US/t)2,4892,498-9.00-0.36-3.11
Tin ($US/t)20,62020,380240.001.186.46
Uranium ($US/lb)29.0029.000.000.000.70
Australian Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
ASX All Ords5,8375,8333.000.062.78
S&P/ASX 2005,7785,7734.000.073.14
ASX 24 Futures5,721
Australian Market Report

Monday 14 January - close. Disappointing Chinese trade data has given Australia's mining and energy sectors a whack and kept the broader market flat after what promised to be a positive start to the week. The benchmark S&P/ASX200 index closed 1.2 points, or 0.02 per cent, lower at 5,773.4 at 1630 AEDT on Monday as early gains on US-China trade hopes evaporated. The broader All Ordinaries was down 1.6 points, or 0.03 per cent, at 5,833.2.

Ashanti Headlines

Alliance Mineral Assets Limited - Restructure of Lithium Offtake Agreements

  • Alliance Mineral Assets Limited (ASX: A40; SGX: 40F) this morning announced that Alliance and its subsidiary Lithco No.2 Pty Ltd (Lithco) have each agreed with Burwill Lithium Company Limited (BCLC) and its parent company Burwill Holdings Limited (Burwill Holdings) that BCLC will transfer its rights and obligations as the buyer under their respective long-term offtake agreements (Lithium Offtake Agreements) to Jiangxi Bao Jiang Lithium Industrial Limited (JBJLIL). JBJLIL is owned 50:50 by BCLC and Jiangte Special Electric Motor Co., Ltd (Jiangte).
  • The Lithium Offtake Agreements will also be amended effective 14 January 2019 (Amended Lithium Offtake Agreements).
  • Highlights:
    • Transferring the Lithium Offtake Agreements to JBJLIL indicates strong support for the Bald Hill Mine from Jiangte which is increasing its lithium concentrate conversion capacity as it moves towards becoming a significant player in the downstream processing market in China
    • Amended Lithium Offtake Agreements provide for a market-linked pricing mechanism, with lower and upper limits of US$680/tonne and US$1080/tonne respectively (FOB 6% Li2O), for the remaining term ending on 31 December 2022.
    • Remaining 18,000dmt from 2018 production will be purchased by JBJLIL at the 2018 fixed price of US$880 per dmt FOB at 6% Li2O. ETA for shipping is end of January 2019.
    • Exclusivity and pre-emptive right have been removed from the Lithium Offtake Agreements, allowing Alliance to diversify its customer base.
    • Maximum commitment for concentrate supply under the Amended Lithium Offtake Agreements is 100,000 tonnes in 2019 (minimum 80,000 tonnes) and 140,000 tonnes for each year between 2020 and 2022 (minimum 100,000 tonnes).
    • Alliance is seeking new offtake partners to purchase remaining Stage 1 lithium and Stage 2 lithium concentrate production. Offtake interest has been strong as there is limited uncommitted, high quality, spodumene available from producers for 2019.
    • Repayments of outstanding interest free offtake prepayments (US$8.8million) 1 frozen until 2021. Offtake prepayments remain interest free and repaid at the rate of 15% of the value of each lithium concentrate shipment from 1 January 2021 until repaid.
    • Revised mine schedule for 2019 and 2020 to accommodate increased ore processing rates expected in the third quarter of 2019.
    • Production guidance for the period January to June 2019 increased to between 65,000dmt to 80,000dmt lithium concentrate from 55,000dmt to 60,000dmt for the six months between July and December 2018.
  • MD Mark Calderwood commented “The offtake agreement transfer from Burwill to JBJLIL is a good outcome for Alliance as it provides certainty for the demand of our premium quality spodumene concentrate while simultaneously freeing us up to sell approximately 50% of our annual production to other customers. We continue to see a high level of interest in the premium spodumene concentrate which Bald Hill produces and this demand coincides well with our projected increases in lithium concentrate production from Q3 2019 onwards.”
  • A link to the full announcement can be found here
  • Please contact the desk on +61 8 6169 2668 should you wish to discuss further

  • About Jiangxi Bao Jiang Lithium Industrial Limited
    • JBJLIL is an incorporated joint venture between Jiangte and Burwill Holdings. JBJLIL operates one of the three large lithium concentrate convertors at the 30 hectare Jiangte owned facility in Yuan Zhou District, Yichun, Jiangxi. When fully operational, the single JBJLIL joint venture converter should be capable of processing about 10,000 tonnes of spodumene concentrate per month. The lithium concentrate converter was constructed in June 2018 and includes advanced technologies in the area of the kiln and evaporation processes to achieve industry minimum standard emissions of H2S and CO2 from tail gas. Jiangte, through its wholly-owned subsidiaries in China, Europe and Japan, is engaged in the R&D, production and sales of specialised electric motors and the production of lithium battery cathode material, electric automobile drive motor and control systems, and electric vehicles. Jiangte owns two conversion plants (including JBJLIL) in Yichun with total nameplate capacity of 45,000tpa of lithium salts from spodumene and lepidolite. It is listed on Shenzhen Stock Exchange and has a market capitalisation of approximately 10B RMB (A$2.0B). Burwill Holdings is a Hong Kong-based investment holding company principally engaged in commodities trading. It has been listed on the Hong Kong stock exchange since 1983.

Have a question? admin@ashanticapital.com.au

ERA Communications