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Futures Slide Alongside Cryptocurrencies Amid China Crackdown

Futures Slide Alongside Cryptocurrencies Amid China Crackdown

US futures and European stocks fell amid ongoing nerves over the Evergrande…

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This article was originally published by Zero Hedge

Futures Slide Alongside Cryptocurrencies Amid China Crackdown

US futures and European stocks fell amid ongoing nerves over the Evergrande default, while cryptocurrency-linked stocks tumbled after the Chinese central bank said such transactions are illegal. Sovereign bond yields fluctuated after an earlier selloff fueled by the prospect of tighter monetary policy. At 745am ET, S&P 500 e-minis were down 19.5 points, or 0.43%, Nasdaq 100 e-minis were down 88.75 points, or 0.58% and Dow e-minis were down 112 points, or 0.33%.

In the biggest overnight news, Evergrande offshore creditors remain in limbo and still haven’t received their coupon payment effectively starting the 30-day grace period, while also in China, the State Planner issued a notice on the crackdown of cryptocurrency mining, will strictly prohibit financing for new crypto mining projects and strengthen energy consumption controls of new crypto mining projects. Subsequently, the PBoC issued a notice to further prevent and dispose of the risks from speculating on cryptocurrencies, to strengthen monitoring of risks from crypto trading and such activities are illegal.

The news sent the crypto space tumbling as much as 8% while cryptocurrency-exposed stocks slumped in U.S. premarket trading. Marathon Digital (MARA) drops 6.5%, Bit Digital (BTBT) declines 4.7%, Riot Blockchain (RIOT) -5.9%, Coinbase -2.8%.

Big banks including JPMorgan, Citigroup, Morgan Stanley and Bank of America Corp slipped about 0.5%, while oil majors Exxon Mobil and Chevron Corp were down 0.4% and 0.3%, respectively, in premarket trading.Mega-cap FAAMG tech giants fell between 0.5% and 0.6%. Nike shed 4.6% after the sportswear maker cut its fiscal 2022 sales expectations and warned of delays during the holiday shopping season. Several analysts lowered their price targets on the maker of sports apparel and sneakers after the company cut its FY revenue growth guidance to mid-single- digits. Here are some of the biggest U.S. movers today:

  • Helbiz (HLBZ) falls 10% after the micromobility company filed with the SEC for the sale of as many as 11m shares by stockholders.
  • Focus Universal (FCUV), an online marketing company that’s been a favorite of retail traders, surged 26% in premarket trading after the stock was cited on Stocktwits in recent days.
  • Vail Resorts (MTN) falls 2.7% in postmarket trading after its full-year forecasts for Ebitda and net income missed at the midpoint.
  • GlycoMimetics (GLYC) jumps 15% postmarket after announcing that efficacy and safety data from a Phase 1/2 study of uproleselan in patients with acute myeloid leukemia were published in the journal Blood on Sept. 16.
  • VTV Therapeutics (VTVT) surges 30% after company says its HPP737 psoriasis treatment showed favorable safety and tolerability profile in a multiple ascending dose study.

Fears about a sooner-than-expected tapering amid signs of stalling U.S. economic growth and concerns over a spillover from China Evergrande’s default had rattled investors in September, putting the benchmark S&P 500 index on course to snap a seven-month winning streak. Elaine Stokes, a portfolio manager at Loomis Sayles & Co., told Bloomberg Television, adding that “what they did is tell us that they feel really good about the economy.” While the bond selloff vindicated Treasury bears who argue yields are too low to reflect fundamentals, others see limits to how high they can go.

“We’d expected bond yields to go higher, given the macro situation where growth is still very strong,” Sylvia Sheng, global multi-asset strategist with JPMorgan Asset Management, said on Bloomberg Television. “But we do stress that is a modest view, because we think that upside to yields is still limited from here given that central banks including the Fed are still buying bonds.”

Still, Wall Street’s main indexes rallied in the past two session and are set for small weekly gains.

European equities dipped at the open but trade off worst levels, with the Euro Stoxx 50 sliding as much as 1.1% before climbing off the lows. France’s CAC underperformed at the margin. Retail, financial services are the weakest performers. EQT AB, Europe’s biggest listed private equity firm, fell as much as 8.1% after Sweden’s financial watchdog opened an investigation into suspected market abuse. Here are some of the other biggest European movers today:

  • SMCP shares surge as much as 9.9%, advancing for a 9th session in 10, amid continued hopes the financial troubles of its top shareholder will ultimately lead to a sale
  • TeamViewer climbs much as 4.2% after Bankhaus Metzler initiated coverage with a buy rating, citing the company’s above-market growth
  • AstraZeneca gains as much as 3.6% after its Lynparza drug met the primary endpoint in a prostate cancer trial
  • Darktrace drops as much as 9.2%, paring the stock’s rally over the past few weeks, as a technical pattern triggered a sell signal
  • Adidas and Puma fall as much as 4% and 2.9%, respectively, after U.S. rival Nike’s “large cut” to FY sales guidance, which Jefferies said would “likely hurt” shares of European peers

Earlier in the session, Asian stocks rose for a second day, led by rallies in Japan and Taiwan, following U.S. peers higher amid optimism over the Federal Reserve’s bullish economic outlook and fading concerns over widespread contagion from Evergrande. Stocks were muted in China and Hong Kong. India’s S&P BSE Sensex topped the 60,000 level for the first time on Friday on optimism that speedier vaccinations will improve demand for businesses in Asia’s third-largest economy.

The MSCI Asia Pacific Index gained as much as 0.7%, with TSMC and Sony the biggest boosts. That trimmed the regional benchmark’s loss for the week to about 1%. Japan’s Nikkei 225 climbed 2.1%, reopening after a holiday, pushing its advance for September to 7.7%, the best among major global gauges. The Asian regional benchmark pared its gain as Hong Kong stocks fell sharply in late afternoon trading amid continued uncertainty, with Evergrande giving no sign of making an interest payment that was due Thursday. Among key upcoming events is the leadership election for Japan’s ruling party next week, which will likely determine the country’s next prime minister. “Investor concerns over the Evergrande issue have retreated a bit for now,” said Hajime Sakai, chief fund manager at Mito Securities Co. in Tokyo. “But investors will have to keep downside risk in the corner of their minds.” Indian stocks rose, pushing the Sensex above 60,000 for the first time ever. Key gauges fell in Singapore, Malaysia and Australia, while the Thai market was closed for a holiday.

Treasuries are higher as U.S. trading day begins after rebounding from weekly lows reached during Asia session, adding to Thursday’s losses. The 10-year yield was down 1bp at ~1.42%, just above the 100-DMA breached on Thursday for the first time in three months; it climbed to 1.449% during Asia session, highest since July 6, and remains 5.2bp higher on the week, its fifth straight weekly increase. Several Fed speakers are slated, first since Wednesday’s FOMC commentary set forth a possible taper timeline.  Bunds and gilts recover off cheapest levels, curves bear steepening. USTs bull steepen, richening 1.5bps from the 10y point out. Peripheral spreads are wider. BTP spreads widen 2-3bps to Bunds.

In FX, the Bloomberg Dollar Spot Index climbed back from a one-week low as concern about possible contagion from Evergrande added to buying of the greenback based on the Federal Reserve tapering timeline signaled on Wednesday. NZD, AUD and CAD sit at the bottom of the G-10 scoreboard. ZAR and TRY are the weakest in EM FX. The pound fell after its rally on Thursday as investors looked ahead to BOE Governor Andrew Bailey’s sPeech next week about a possible interest-rate hike. Traders are betting that in a contest to raise borrowing costs first, the Bank of England will be the runaway winner over the Federal Reserve. The New Zealand and Aussie dollars led declines among Group-of-10 peers. The euro was trading flat, with a week full of events failing “to generate any clear directional move,” said ING analysts Francesco Pesole and Chris Turner. German IFO sentiment indeces will “provide extra indications about the area’s sentiment as  businesses faced a combination of delta variant concerns and lingering supply disruptions”. The Norwegian krone is the best performing currency among G10 peers this week, with Thursday’s announcement from the Norges Bank offering support

In commodities, crude futures hold a narrow range up around best levels for the week. WTI stalls near $73.40, Brent near $77.50. Spot gold extends Asia’s gains, adding $12 on the session to trade near $1,755/oz. Base metals are mixed, LME nickel and aluminum drop ~1%, LME tin outperforms with a 2.8% rally. Bitcoin dips after the PBOC says all crypto-related transactions are illegal.

Looking to the day ahead now, we’ll hear from Fed Chair Powell, Vice Chair Clarida and the Fed’s Mester, Bowman, George and Bostic, as well as the ECB’s Lane and Elderson, and the BoE’s Tenreyro. Finally, a summit of the Quad Leaders will be held at the White House, including President Biden, and the Prime Ministers of Australia, India and Japan.

Market Snapshot

  • S&P 500 futures down 0.3% to 4,423.50
  • STOXX Europe 600 down 0.7% to 464.18
  • German 10Y yield fell 8.5 bps to -0.236%
  • Euro little changed at $1.1737
  • MXAP up 0.4% to 201.25
  • MXAPJ down 0.5% to 643.20
  • Nikkei up 2.1% to 30,248.81
  • Topix up 2.3% to 2,090.75
  • Hang Seng Index down 1.3% to 24,192.16
  • Shanghai Composite down 0.8% to 3,613.07
  • Sensex up 0.2% to 60,031.83
  • Australia S&P/ASX 200 down 0.4% to 7,342.60
  • Kospi little changed at 3,125.24
  • Brent Futures up 0.4% to $77.57/bbl
  • Gold spot up 0.7% to $1,755.38
  • U.S. Dollar Index little changed at 93.14

Top Overnight News from Bloomberg

  • China Evergrande Group’s unusual silence about a dollar-bond interest payment that was due Thursday has put a focus on what might happen during a 30-day grace period.
  • The Reserve Bank of Australia’s inflation target is increasingly out of step with international counterparts and fails to account for structural changes in the country’s economy over the past 30 years, Westpac Banking Corp.’s Bill Evans said.
  • With central banks from Washington to London this week signaling more alarm over faster inflation, the ultra-stimulative path of the euro zone and some of its neighbors appears lonelier than ever.
  • China’s central bank continued to pump liquidity into the financial system on Friday as policy makers sought to avoid contagion stemming from China Evergrande Group spreading to domestic markets.

A more detailed look at global markets courtesy of Newsquawk

Asian equity markets traded mixed with the region failing to fully sustain the impetus from the positive performance across global counterparts after the silence from Evergrande and lack of coupon payments for its offshore bonds, stirred uncertainty for the company. ASX 200 (-0.4%) was negative as underperformance in mining names and real estate overshadowed the advances in tech and resilience in financials from the higher yield environment. Nikkei 225 (+2.1%) was the biggest gainer overnight as it played catch up to the prior day’s recovery on return from the Autumnal Equinox holiday in Japan and with exporters cheering the recent risk-conducive currency flows, while KOSPI (-0.1%) was lacklustre amid the record daily COVID-19 infections and after North Korea deemed that it was premature to declare that the Korean War was over. Hang Seng (-1.2%) and Shanghai Comp. (-0.8%) were indecisive after further liquidity efforts by the PBoC were offset by concerns surrounding Evergrande after the Co. failed to make coupon payments due yesterday for offshore bonds but has a 30-day grace period with the Co. remaining quiet on the issue. Finally, 10yr JGBs were lower on spillover selling from global counterparts including the declines in T-notes as the US 10yr yield breached 1.40% for the first time since early-July with the pressure in bonds also stemming from across the Atlantic following a more hawkish BoE, while the presence of the BoJ in the market today for over JPY 1.3tln of government bonds with 1yr-10yr maturities did very little to spur prices.

Top Asian News

  • Rivals for Prime Minister Battle on Social Media: Japan Election
  • Asian Stocks Rise for Second Day, Led by Gains in Japan, Taiwan
  • Hong Kong Stocks Still Wagged by Evergrande Tail
  • Hong Kong’s Hang Seng Tech Index Extends Decline to More Than 2%

European equities (Stoxx 600 -0.9%) are trading on the back foot in the final trading session of the week amid further advances in global bond yields and a mixed APAC handover. Overnight, saw gains for the Nikkei 225 of 2.1% with the index aided by favourable currency flows, whilst Chinese markets lagged (Shanghai Comp. -0.8%, Hang Seng -1.6%) with further liquidity efforts by the PBoC offset by concerns surrounding Evergrande after the Co. failed to make coupon payments due yesterday for offshore bonds. As context, despite the losses in Europe today, the Stoxx 600 is still higher by some 1.2% on the week. Stateside, futures are also on a softer footing with the ES down by 0.4% ahead of a busy Fed speaker schedule. Back to Europe, sectors are lower across the board with Retail and Personal & Household Goods lagging peers. The former has been hampered by losses in Adidas (-3.0%) following after hours earnings from Nike (-4.2% pre-market) which saw the Co. cut its revenue guidance amid supply chain woes. AstraZeneca (+2.1%) sits at the top of the FTSE 100 after announcing that the Lynparza PROpel trial met its primary endpoint. Daimler’s (+0.1%) Mercedes-Benz has announced that it will take a 33% stake in a battery cell manufacturing JV with Total and Stellantis. EQT (-6.5%) sits at the foot of the Stoxx 600 after the Swedish FSA announced it will open an investigation into the Co.

Top European News

  • EQT Investigated by Sweden’s FSA Over Suspected Market Abuse
  • Gazprom Says Claims of Gas Under-supply to Europe Are ‘Absurd’
  • German Sept. Ifo Business Confidence 98.8; Est. 99
  • German Business Index at Five-Month Low in Pre-Election Verdict

In FX, the rot seems to have stopped for the Buck in terms of its sharp and marked fall from grace amidst post-FOMC reflection and re-positioning in the financial markets on Thursday. Indeed, the Dollar index has regained some poise to hover above the 93.000 level having recoiled from 93.526 to 92.977 over the course of yesterday’s hectic session that saw the DXY register a marginal new w-t-d high and low at either end of the spectrum. Pre-weekend short covering and consolidation may be giving the Greenback a lift, while the risk backdrop is also less upbeat ahead of a raft of Fed speakers flanking US new home sales data. Elsewhere, the Euro remains relatively sidelined and contained against the Buck with little independent inspiration from the latest German Ifo survey as the business climate deteriorated broadly in line with consensus and current conditions were worse than forecast, but business expectations were better than anticipated. Hence, Eur/Usd is still stuck in a rut and only briefly/fractionally outside 1.1750-00 parameters for the entire week, thus far, as hefty option expiry interest continues to keep the headline pair in check. However, there is significantly less support or gravitational pull at the round number today compared to Thursday as ‘only’ 1.3 bn rolls off vs 4.1 bn, and any upside breach could be capped by 1.1 bn between 1.1765-85.

  • CAD/NZD/AUD – Some payback for the non-US Dollars following their revival, with the Loonie waning from 1.2650+ peaks ahead of Canadian budget balances, though still underpinned by crude as WTI hovers around Usd 73.50/brl and not far from decent option expiries (from 1.2655-50 and 1.2625-30 in 1.4 bn each). Similarly, the Kiwi has faded after climbing to within single digits of 0.7100 in wake of NZ trade data overnight revealing a much wider deficit as exports slowed and imports rose, while the Aussie loses grip of the 0.7300 handle and skirts 1.1 bn option expiries at 0.7275.
  • CHF/GBP/JPY – The Franc is fairly flat and restrained following a dovish SNB policy review that left in lagging somewhat yesterday, with Usd/Chf and Eur/Chf straddling 0.9250 and 1.0850 respectively, in contrast to Sterling that is paring some hawkish BoE momentum, as Cable retreats to retest bids circa 1.3700 and Eur/Gbp bounces from sub-0.8550. Elsewhere, the Yen has not been able to fend off further downside through 110.00 even though Japanese participants have returned to the fray after the Autumn Equinox holiday and reports suggest some COVID-19 restrictions may be lifted in 13 prefectures on a trial basis.
  • SCANDI/EM/PM/CRYPTO – A slight change in the pecking order in Scandi-land as the Nok loses some post-Norges Bank hike impetus and the Sek unwinds a bit of its underperformance, but EM currencies are bearing the brunt of the aforementioned downturn in risk sentiment and firmer Usd, with the Zar hit harder than other as Gold is clings to Usd 1750/oz and Try down to deeper post-CBRT rate cut lows after mixed manufacturing sentiment and cap u readings. Meanwhile, Bitcoin is being shackled by the latest Chinese crackdown on mining and efforts to limit risks from what it describes as unlawful speculative crypto currency trading.

In commodities, WTI and Brent are set the conclude the week in the green with gains in excess of 2% for WTI at the time of writing; in-spite of the pressure seen in the complex on Monday and the first-half of Tuesday, where a sub USD 69.50/bbl low was printed. Fresh newsflow has, once again, been limited for the complex and continues to focus on the gas situation. More broadly, no update as of yet on the Evergrande interest payment and by all accounts we appear to have entered the 30-day grace period for this and, assuming catalysts remain slim, updates on this will may well dictate the state-of-play. Schedule wise, the session ahead eyes significant amounts of central bank commentary but from a crude perspective the weekly Baker Hughes rig count will draw attention. On the weather front, Storm Sam has been upgraded to a Hurricane and is expected to rapidly intensify but currently remains someway into the mid-Atlantic. Moving to metals, LME copper is pivoting the unchanged mark after a mixed APAC lead while attention is on Glencore’s CSA copper mine, which it has received an offer for; the site in 2020 produced circa. 46k/T of copper which is typically exported to Asia smelters. Elsewhere, spot gold and silver are firmer but have been very contained and remain well-within overnight ranges thus far. Which sees the yellow metal holding just above the USD 1750/oz mark after a brief foray below the level after the US-close.

US Event Calendar

  • 10am: Aug. New Home Sales MoM, est. 1.0%, prior 1.0%
  • 10am: Aug. New Home Sales, est. 715,000, prior 708,000

Central Bank Speakers

  • 8:45am: Fed’s Mester Discusses the Economic Outlook
  • 10am: Powell, Clarida and Bowman Host Fed Listens Event
  • 10:05am: Fed’s George Discusses Economic Outlook
  • 12pm: Fed’s Bostic Discusses Equitable Community Development

DB’s Jim Reid concludes the overnight wrap

WFH today is a bonus as it’s time for the annual ritual at home where the latest, sleekest, shiniest iPhone model arrives in the post and i sheepishly try to justify to my wife when I get home why I need an incremental upgrade. This year to save me from the Spanish Inquisition I’m going to intercept the courier and keep quiet. Problem is that such speed at intercepting the delivery will be logistically challenging as I remain on crutches (5 weeks to go) and can’t grip properly with my left hand due to an ongoing trapped nerve. I’m very glad I’m not a racehorse. Although hopefully I can be put out to pasture in front of the Ryder Cup this weekend.

The big news of the last 24 hours has been a galloping global yield rise worthy of the finest thoroughbred. A hawkish Fed meeting, with the dots increasing and the end of QE potentially accelerated, didn’t quite have the ability to move markets but the global dam finally broke yesterday with Norway being the highest profile developed country to raise rates this cycle (expected), but more importantly a Bank of England meeting that saw the market reappraise rate hikes.

Looking at the specific moves, yields on 10yr Treasuries were up +13.0bps to 1.430% in their biggest daily increase since 25 February, as both higher real rates (+7.9bps) and inflation breakevens (+4.9bps) drove the advance. US 10yr yields had been trading in a c.10bp range for the last month before breaking out higher, though they have been trending higher since dropping as far as 1.17% back in early-August. US 30yr yields rose +13.2bps, which was the biggest one day move in long dated yields since March 17 2020, which was at the onset of the pandemic and just days after the Fed announced it would be starting the current round of QE. The large selloff in US bonds saw the yield curve steepen and the long-end give back roughly half of the FOMC flattening from the day before. The 5y30y curve steepened 3.4bps for a two day move of -3.3bps. However the 2y10y curve steepened +10.5bps, completely reversing the prior day’s flattening (-4.2bps) and leaving the spread at 116bp, the steepest level since first week of July.

10yr gilt yields saw nearly as strong a move (+10.8bps) with those on shorter-dated 2yr gilts (+10.7bps) hitting their highest level (0.386%) since the pandemic began.That came on the back of the BoE’s latest policy decision, which pointed in a hawkish direction, building on the comment in the August statement that “some modest tightening of monetary policy over the forecast period is likely to be necessary” by saying that “some developments during the intervening period appear to have strengthened that case”. The statement pointed out that the rise in gas prices since August represented an upside risks to their inflation projections from next April, and the MPC’s vote also saw 2 members (up from 1 in August) vote to dial back QE. See DB’s Sanjay Raja’s revised rate hike forecasts here. We now expect a 15bps hike in February.

The generalised move saw yields in other European countries rise as well, with those on 10yr bunds (+6.6bps), OATs (+6.5bps) and BTPs (+5.7bps) all seeing big moves higher with 10yr bunds seeing their biggest climb since late-February and back to early-July levels as -0.258%.

The yield rise didn’t stop equity indices recovering further from Monday’s rout, with the S&P 500 up +1.21% as the index marked its best performance in over 2 months, and its best 2-day performance since May. Despite the mood at the end of the weekend, the S&P now starts Friday in positive territory for the week. The rally yesterday was led by cyclicals for a second straight day with higher commodity prices driving outsized gains for energy (+3.41%) and materials (+1.39%) stocks, and the aforementioned higher yields causing banks (+3.37%) and diversified financials (+2.35%) to outperform. The reopening trade was the other main beneficiary as airlines rose +2.99% and consumer services, which include hotel and cruiseline companies, gained +1.92%. In Europe, the STOXX 600 (+0.93%) witnessed a similarly strong performance, with index led by banks (+2.16%). As a testament to the breadth of yesterday’s rally, the travel and leisure sector (+0.04%) was the worst performing sector on this side of the Atlantic even while registering a small gain and lagging its US counterparts.

Before we get onto some of yesterday’s other events, it’s worth noting that this is actually the last EMR before the German election on Sunday, which has long been signposted as one of the more interesting macro events on the 2021 calendar, the results of which will play a key role in not just domestic, but also EU policy. And with Chancellor Merkel stepping down after four terms in office, this means that the country will soon be under new management irrespective of who forms a government afterwards. It’s been a volatile campaign in many respects, with Chancellor Merkel’s CDU/CSU, the Greens and the centre-left SPD all having been in the lead at various points over the last six months. But for the last month Politico’s Poll of Polls has shown the SPD consistently ahead, with their tracker currently putting them on 25%, ahead of the CDU/CSU on 22% and the Greens on 16%. However the latest poll from Forschungsgruppe Wahlen yesterday suggested a tighter race with the SPD at 25, the CDU/CSU at 23% and the Greens at 16.5%.

If the actual results are in line with the recent averages, it would certainly mark a sea change in German politics, as it would be the first time that the SPD have won the popular vote since the 2002 election. Furthermore, it would be the CDU/CSU’s worst ever result, and mark the first time in post-war Germany that the two main parties have failed to win a majority of the vote between them, which mirrors the erosion of the traditional big parties in the rest of continental Europe. For the Greens, 15% would be their best ever score, and exceed the 9% they got back in 2017 that left them in 6th place, but it would also be a disappointment relative to their high hopes back in the spring, when they were briefly polling in the mid-20s after Annalena Baerbock was selected as their Chancellor candidate.

In terms of when to expect results, the polls close at 17:00 London time, with initial exit polls released immediately afterwards. However, unlike the UK, where a new majority government can immediately come to power the day after the election, the use of proportional representation in Germany means that it could potentially be weeks or months before a new government is formed. Indeed, after the last election in September 2017, it wasn’t until March 2018 that the new grand coalition between the CDU/CSU and the SPD took office, after attempts to reach a “Jamaica” coalition between the CDU/CSU, the FDP and the Greens was unsuccessful. In the meantime, the existing government will act as a caretaker administration.

On the policy implications, it will of course depend on what sort of government is actually formed, but our research colleagues in Frankfurt have produced a comprehensive slidepack (link here) running through what the different parties want across a range of policies, and what the likely coalitions would mean for Germany. They also put out another note yesterday (link here) where they point out that there’s still much to play for, with the SPD’s lead inside the margin of error and with an unusually high share of yet undecided voters.

Moving on to Asia and markets are mostly higher with the Nikkei (+2.04%), CSI (+0.53%) and India’s Nifty (+0.52%) up while the Hang Seng (-0.03%), Shanghai Comp (-0.07%) and Kospi (-0.10%) have all made small moves lower. Meanwhile, the Evergrande group missed its dollar bond coupon payment yesterday and so far there has been no communication from the group on this. They have a 30-day grace period to make the payment before any event of default can be declared. This follows instructions from China’s Financial regulators yesterday in which they urged the group to take all measures possible to avoid a near-term default on dollar bonds while focusing on completing unfinished properties and repaying individual investors.

Yields on Australia and New Zealand’s 10y sovereign bonds are up +14.5bps and +11.3bps respectively this morning after yesterday’s move from their western counterparts. Yields on 10y USTs are also up a further +1.1bps to 1.443%. Elsewhere, futures on the S&P 500 are up +0.04% while those on the Stoxx 50 are down -0.10%. In terms of overnight data, Japan’s August CPI printed at -0.4% yoy (vs. -0.3% yoy expected) while core was unchanged in line with expectations. We also received Japan’s flash PMIs with the services reading at 47.4 (vs. 42.9 last month) while the manufacturing reading came in at 51.2 (vs. 52.7 last month). In pandemic related news, Jiji reported that Japan is planning to conduct trials of easing Covid restrictions, with 13 prefectures indicating they’d like to participate. This is likely contributing to the outperformance of the Nikkei this morning.

Back to yesterday now, and one of the main highlights came from the flash PMIs, which showed a continued deceleration in growth momentum across Europe and the US, and also underwhelmed relative to expectations. Running through the headline numbers, the Euro Area composite PMI fell to 56.1 (vs. 58.5 expected), which is the lowest figure since April, as both the manufacturing (58.7 vs 60.3 expected) and services (56.3 vs. 58.5 expected) came in beneath expectations. Over in the US, the composite PMI fell to 54.5 in its 4th consecutive decline, as the index hit its lowest level in a year, while the UK’s composite PMI at 54.1 (vs. 54.6 expected) was the lowest since February when the country was still in a nationwide lockdown.

Risk assets seemed unperturbed by the readings, and commodities actually took another leg higher as they rebounded from their losses at the start of the week. The Bloomberg Commodity Spot index rose +1.12% as Brent crude oil (+1.39%) closed at $77.25/bbl, which marked its highest closing level since late 2018, while WTI (+1.07%) rose to $73.30/bbl, so still a bit beneath its recent peak in July. However that is a decent rebound of roughly $11/bbl since its recent low just over a month ago. Elsewhere, gold (-1.44%) took a knock amidst the sharp move higher in yields, while European natural gas prices subsidised for a third day running, with futures now down -8.5% from their intraday peak on Tuesday, although they’re still up by +71.3% since the start of August.

US negotiations regarding the upcoming funding bill and raising the debt ceiling are ongoing, with House Speaker Pelosi saying that the former, also called a continuing resolution, will pass “both houses by September 30,” and fund the government through the first part of the fiscal year, starting October 1. Treasury Secretary Yellen has said the US will likely breach the debt ceiling sometime in the next month if Congress does not increase the level, and because Republicans are unwilling to vote to raise the ceiling, Democrats will have to use the once-a-fiscal-year tool of budget reconciliation to do so. However Democrats, are also using that process for the $3.5 trillion dollar economic plan that makes up the bulk of the Biden agenda, and have not been able to get full party support yet. During a joint press conference with Speaker Pelosi, Senate Majority Leader Schumer said that Democrats have a “framework” to pay for the Biden Economic agenda, which would imply that the broad outline of a deal was reached between the House, Senate and the White House. However, no specifics were mentioned yesterday. With Democrats looking to vote on the bipartisan infrastructure bill early next week, negotiations today and this weekend on the potential reconciliation package will be vital.

Looking at yesterday’s other data, the weekly initial jobless claims from the US for the week through September 18 unexpectedly rose to 351k (vs. 320k expected), which is the second week running they’ve come in above expectations. Separately, the Chicago Fed’s national activity index fell to 0.29 in August (vs. 0.50 expected), and the Kansas City Fed’s manufacturing activity index also fell more than expected to 22 in September (vs. 25 expected).

To the day ahead now, and data highlights include the Ifo’s business climate indicator from Germany for September, along with Italian consumer confidence for September and US new home sales for August. From central banks, we’ll hear from Fed Chair Powell, Vice Chair Clarida and the Fed’s Mester, Bowman, George and Bostic, as well as the ECB’s Lane and Elderson, and the BoE’s Tenreyro. Finally, a summit of the Quad Leaders will be held at the White House, including President Biden, and the Prime Ministers of Australia, India and Japan.

Tyler Durden
Fri, 09/24/2021 – 08:12

Author: Tyler Durden

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Denarius Silver: Corporate Overview

Denarius Silver Corp (TSXV: DSLV) is a Toronto-based junior silver exploration company engaged in the acquisition, exploration, development and eventual

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Denarius Silver Corp (TSXV: DSLV) is a Toronto-based junior silver exploration company engaged in the acquisition, exploration, development and eventual operation of mining projects in high-grade districts. The company is focused on developing the past-producing Guia Antigua and Zancudo silver-gold projects in Colombia, and its Lomero-Poyatos project in Spain’s prolific Iberian Pyrite Belt, which hosts the world’s largest concentration of massive sulphides.

The Investment Thesis

We base our investment thesis on the following factors:

  1. The Lomero-Payatos project is located within the prolific Iberian Pyrite Belt in northern Spain, which is considered to be one of the world’s largest and most productive volcanogenic massive sulfide (VMS) structures.
  2. The Iberian Pyrite Belt been mined for over a thousand years and has produced over 2000 million tons of ore.
  3. Spain and Colombia are both well established mining jurisdictions with a long history of mining. Denarius’ projects are supported by well established mining infrastructure. 
  4. Denarius’ Colombia projects are in close proximity to Gran Colombia’s Segovia Mine, and Gran Colombia is a major shareholder in DSLV.
  5. The Colombia properties had historical production and vein structures offer significant discovery potential for new mineralized zones.
  6. The company has an experienced management team that is focused on building a business around production and cash flow, and developing its exploration projects to a point where the added value will attract potential merger and acquisition partners.

The Deep Dive views Denarius Silver as a development-stage exploration company with considerable upside potential and relatively low downside risk. In Colombia, the two DSLV projects are close to Gran Colombia’s flagship Segovia Mine and host to past-producing silver-gold mines that the Company will restart and conduct more extensive exploration to expand the size and scope of the deposits. Positive exploration results could generate interest from larger players and could prompt an exit transaction or strategic partnership for Denarius.

The Projects

Lomero-Poyatos Project

The Lomero-Poyatos deposit is located in the north-east part of the prolific Spanish/Portuguese Iberian Pyrite Belt in the Huelva Province of Southern Spain, one of the world’s most productive volcanogenic massive sulfide IVMS) belts. The site has a well established water, power and highway infrastructure, a reliable local workforce and services, as well as proximity to several high-capacity processing facilities and the port at Huelva.

The Lomero-Poyatos deposit has two separate near-surface mineral deposits, the Lomero to the east and Poyatos to the west, that combine to form a single deposit at depth. Mineralization is said to consist of gold, as well as zinc, lead, and copper. Further, Lomero has one of the largest concentrations of gold mineralization in the region, having assayed 2.0 metres at 14.1 g/t gold as well as 0.55 metres at 16.84 g/t gold.

The Lomero-Poyatos deposit was discovered in 1853 and is a former sulphide pyrite mine with underground development on eight levels, which are currently flooded. The property was initially mined in the late 1850’s as an open pit operation until 1905 when it became an underground mine until its eventual closure in 1991.

Most of the historical production of 2.6 million tonnes came from underground operations, and the mined massive pyrite ore was used as a source of sulphur for sulphuric acid production. The historical resource calculation as per a 2002 NI-43-101 report showed 20.61 Mt of 3.1 g/t gold,  70 g/t silver, 3.3% zinc, 1.2% copper, 1.2% lead, and 37% sulfur. Management believes that because a gravity survey identified anomalies at depth and the deposit is open along strike and down dip, there is potential to significantly increase the resource estimate for the deposit.

A 23,500 metre exploration program is currently underway on the property, with the program slated to consist of 81 drill holes which will include both infill and step out drilling.

Guia Antigua Project

The Guia Antigua Project was acquired from Gran Colombia Gold Corp (TSX:GCM), Colombia’s largest underground gold producer and is located in the prolific Segovia-Remedios mining district, Department of Antioquia, 130 kilometers northeast of Medellin. The Guia Antigua Project gives Denarius exploration, development and mining rights under a mining license agreement to a 386-hectare area of the eastern part of Gran Colombia’s mining title RPP-140. The high-grade mines in this region have produced roughly 5 million ounces of gold over a 150 year period.

The property is host to the Guia Antigua mine, which was operated by Sociedad Guias-Gold from 2014–2016 and processed 6,034 tonnes of ore resulting in production of 78,558 ounces of silver and 1,174 ounces of gold with an average head grade of 404.9 g/t silver and 6.05 g/t gold. 

The Guia Antigua property has a highly productive vein system, and a 2018 drill program discovered 3 new veins which returned values of 3,268 g/t of silver and 8.57 g/t gold over 1.2m, and provides significant potential for additional discoveries. Denarius will focus its exploration activities on the Guia Antigua vein, which has similarity to the geology, structure, vein type, and mineralization of the high-grade Segovia Mine veins.

Zancudo Project

The Zancudo property is a 1,052-hectare mining concession within the Middle Cauca Gold Belt in the Titiribi mining district in Antioquia, near GoldMining’s (TSX: GOLD) Titiribi Project, about 27 km south of Medellin. It is host to the historical Independencia silver-gold mine, with the region as a whole having historical production of 1.5 million ounces of silver and 2 million ounces of gold equivalent dating back to 1793. 

The Zancudo deposit lies within the Romeral terrane, which is located on the western side of the Central Cordillera of the Colombian Andes and is covered by continental sediments. Gold mineralization occurs in two zones, the Upper Zone has flat-lying veins with sandstones, and the lower zone, which runs north-south in steep dipping veins.

The Zancudo Project is currently being explored by IAMGOLD Corp. (TSX: IMG) pursuant to an option agreement for the exploration and potential purchase of an interest in the project, which was previously established by Gran Colombia. Iamgold completed a total of 16,224 meters of drilling at Zancudo between 2017 and 2018 and has incurred over $4 million of its $10 million exploration commitment, but due to covid-19, Iamgold suspended its drilling program in 2020. Denarius expects to form a joint venture with IAMGOLD to advance the project.

The Management Team

Serafino Iacono – Interim Chief Executive Officer, Executive Chairman

Mr. Iacono is Executive Chairman of Gran Colombia Gold Corp, and has over 30 years experience in capital markets and public companies, having raised in excess of $4 billion for numerous natural resource projects internationally in Latin America, Canada and the United States. He was a co-founder of Bolivar Gold Corp and Pacific Stratus, and has served as a director and senior executive for a number of resource companies including Pacific Exploration and Production Corp and PetroMagdalena Energy Corp.

Michael Davies – Chief Financial Officer

Mr. Davies holds a B. Commerce degree from the University of Toronto and has over 20 experience as a Chartered Professional Accountant (Ontario) for a number of international and public natural resources companies, providing financial management and strategic planning. He has served in senior management positions several resource companies, including with PetroMagdalena Energy Corp., Coalcorp Mining Inc., Medoro Resources Inc., and LAC Minerals Ltd. 

Jeff Couch – Director

Mr. Couch is a senior financial services executive with extensive experience in the natural resources sector, having advised and raised capital for clients globally, with a particular focus in emerging markets. He has advised several governments on their natural resources capital requirements and has served as a director for a number of resources companies. Mr. Couch works with Orion Resource Partners, a mining focused private equity firm with $6 billion under management, and previously held senior investment banking positions at several large international banks, including BMO Capital Markets (Bank of Montreal), Credit Suisse Europe and Citigroup. 

Lombardo Parades-Arenas – Director

Mr. Paredes-Arenas holds a B. Science in Mechanical Engineering and Master of Economic Analysis and Financial Economics. He currently serves as Chief Executive Officer of Gran Colombia Gold Corp. and brings over 20 years of corporate leadership and operations management experience in the Latin American resource sector. Mr. Paredes held various roles at Petroleos de Venezuela (PDVSA) before becoming an international energy and environmental consultant. 

The Comparables


Colombia is rich in minerals and base metals, which are dispersed throughout the country, and include silver, gold, copper, platinum, emeralds, coltan, and coal. The country has had a long history of gold and silver mining. Although there are a number of gold mines operated by publicly-traded companies in the central and southern parts of the country, much of Colombia’s gold and silver mining production comes from artisanal miners. The Segovia-Remedios mining district is a prolific gold mining district that hosts a number of rich gold mines, yet despite that, the region is still largely unexplored.

In Colombia, the Zancudo and Guia Antigua Projects are close to several medium and large-scale producers, including:

  • Gran Colombia Gold: produced 225,000 ounces of gold in 2020
  • AngloGold and B2 Gold Joint-Venture: 6 million ounces of gold reserves at the Gramalote mine
  • Zijin: 6 million ounces of gold reserves at the Buriticá mine, which Consolidated Gold, sold  to Zijin for USD $1.4 billion

Other exploration companies in the area include:

Antioquia Gold Inc (TSXV: AGD) is a Calgary, Alberta-based mineral exploration and development company that is engaged in the acquisition, exploration, and development of mineral resource properties in Colombia. The company’s project includes their flagship Cisneros project, a 5,630 hectare property located in the central portion of the department of Antioquia, about 80 kilometers northeast of Medellin. The Cisneros mine commenced production in 2019 and the Company is actively exploring the rest of the property to further delineate the size and scope of the deposit.

Soma Gold Corp. (TSXV: SOMA) is a Vancouver-based junior exploration and development company that owns and operates three producing gold mines on a 29,000 hectare property in Antioquia, Colombia within the Central Cordillera of the Andes Mountains. The ore extracted from the La Ye, El Limon and Nechí projects is processed at two mills operated by the company. The mills also process ore from local artisanal miners. Soma is actively continuing its exploration activities to add to its gold reserves.

Gran Colombia Gold Corp (TSX:GCM) is a Toronto-based gold and silver exploration, development and production company with a focus on gold projects in the South American countries of Colombia and Guyana. The Company’s flagship asset in Colombia is the Segovia Project, which hosts the El Silencio gold mine that produced 225,000 ounces of gold in 2020. It is considered to be one of the world’s highest-grade gold mines with proven and probable reserves of over 632,000 ounces at an average grade of 8.92 g/t gold. Gran Colombia is actively exploring the Segovia project that has several other mineralized zones on the property.

O2Gold Inc. (TSXV: OTGO) is an early-stage Canadian mineral exploration company focused on the acquisition and development of mineral projects in Colombia, South America. The Company’s management and professional teams are based in Medellin, Colombia, and have extensive experience in the region. Its Otú Central Project is a 30,000 hectare property comprising 26 mining claim titles and applications located on the Otú Fault and is in close proximity to several other gold producers in the Segovia and Zaragoza regions of Antioquia in Colombia. During the second half of 2021, O2Gold will be actively drilling its Aurora-Quintanillo trench to determine its production strategy to validate its 30 year mining license and to generate cash flow that will help fund the Company’s other exploration activities on the Otú property.


The Iberian Pyrite Belt is arguably the world’s most productive volcanic-hosted massive sulphide (VMS) district with over 80 known deposits producing copper, zinc, lead, gold, silver and tin. The belt hosts eight giant-sized deposits of more than 100 million tonnes of massive sulphides and a number of major mining companies such as Lundin Mining, Trafigura Mining Group and ALMINA have major operations in the region. Aside from Denarius, there are several other junior companies exploring in the vicinity.

Aside from Denarius there are several other junior companies exploring in the vicinity.

Vancouver-based Pan Global Resources Inc (TSXV: PGZ) is a junior exploration company that is developing its Aguilas and Escacena projects in the Iberian Pyrite Belt in southern Spain. The Escacena property is in close proximity to the past-producing Aznalcóllar and Los Frailes mines, and First Quantum’s Las Cruces operating copper mine, 40 km from Seville.

Emerita Resources Corp (TSXV: EMO), is a Canadian resource company currently developing two world-class zinc projects in Spain. The first project, the Iberian Belt West property, has a historical resources estimate of 34.0 tonnes of 0.42% copper, 1.10% lead, 2.30% zinc, 44.0 g/t silver and 0.80 g/t gold. It’s second project, which it expects to be awarded soon, meanwhile hosts a deposit of 20.0 tonnes of of +10% zinc, lead, and silver in an open pit model.

Shares Out (M) Market Value (M)
Emerita Resources 182.42 $600.16
Pan Global Resources 189.08 $122.9
Denarius Silver 207.37 $118.2

The Risks

From our view the following risks are worth considering.

  1. Price of copper, gold and silver. Just as metals prices can be a catalyst, a potential decline in price would have a negative impact on exploration stocks. Copper tends to mirror the economic cycle and poor economic conditions can depress copper prices. If the Chinese economic recovery stumbles, that could cause copper demand to slow and prices to decline.
  2. Drill Results. Poor drill results could negatively affect price performance of the stock.
  3. Market Sentiment. Markets can fluctuate wildly as investor expectations can change rapidly depending on the two most common drivers; fear and greed.

The Catalysts

Some of the potential catalysts we see that could have a large impact on the share price include:

  1. The price of copper, gold, and silver. The most obvious variable for any mineral explorer, developer, or producer is the price of the underlying metals. As the price of a metal rises so does the net asset value of projects rise, which increases shareholder value. 
  2. Broad economic indicators. Given the recent COVID stimulus packages which have seen a massive number of jobless claims, the assumption is that governments and central banks will take on debt funded through quantitative easing (money printing) to fill the gap. Eventually this will likely become inflationary; historically the price of gold and other metals increases with an increase in inflation as investors seek a hedge against inflation. .
  3. The results of any future drill programs at the Company’s projects. DSLV is working to put the Lomero-Poyatos deposit into production and continuing its exploration program with the goal of expanding the resource and getting a better understanding of the underlying size of the deposit. The work programs at the Colombian projects are designed to expand the size and scope of the mineralized zones and to prepare for production. Any meaningful discovery could serve as a catalyst for the common shares. 
  4. Potential future merger and acquisition activity. Due to DSLV management’s extensive experience, expertise, and credibility in Spain and Colombia, it has the ability to attract opportunities to acquire additional quality projects through acquisition or joint venture.

In Conclusion

Denarius Silver Corp is well-positioned in two prolific mining districts in Spain and Colombia which offer shareholders a degree of diversification and somewhat helps de-risk the company. Any meaningful exploration results on the properties could lead to a takeover or joint venture event. The company plans to commence production on its Lomero-Poyatos project in Spain as soon as feasible and will be conducting drilling to expand the size of the deposit and to increase its resources. 

Denarius Silver Corp. represents a compelling new silver-gold opportunity for junior exploration investors. 

FULL DISCLOSURE: Denarius Silver Corp is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover Denarius Silver Corp on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.

The post Denarius Silver: Corporate Overview appeared first on the deep dive.

Author: Phil Gracin

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Precious Metals

Stocks, Bonds, Bitcoin, & Bullion All Bid As Billionaire Tax Threat Builds

Stocks, Bonds, Bitcoin, & Bullion All Bid As Billionaire Tax Threat Builds

First things first, when is a wealth tax not a wealth tax?…

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Stocks, Bonds, Bitcoin, & Bullion All Bid As Billionaire Tax Threat Builds

First things first, when is a wealth tax not a wealth tax? When Janet Yellen says so…

The proposal under consideration from Senate Finance Committee Chairman Ron Wyden (D., Ore.) would impose an annual tax on unrealized capital gains on liquid assets held by billionaires, Treasury Secretary Janet Yellen said Sunday on CNN.

“I wouldn’t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals and right now escape taxation until they’re realized,” Ms. Yellen said.

But House Speaker Nancy Pelosi told CNN:

“We probably will have a wealth tax.”

But markets either a) don’t believe a word of it (given the relationship between all these billionaires as benevolent overlords of the political class), or b) don’t give a shit as The Fed will always be there…

And nowhere is this craziness more obvious than here. While Trump’s SPC (DWAC) stalled today (after rallying 800% in 2 days), TSLA and BKKT took over the crown of momentum-driven insanity kings

TSLA topped the trillion-dollar market-cap level for the first time (TSLA was up more than 1 GM today) on headline about HTZ ordering 100,000 TSLA vehicles…

Surpassing FB (ahead of tonight’s earnings) to join the ‘cuatro comas’ club…

Source: Bloomberg

All on the back of a massive gamma bomb.

@Stalingrad_Poor exclaimed:

“TSLA call options strikes up $10,000 in a single day. I’ve never seen this in my life”

NOTE: If unrealized gains are taxed as income (as several Democrats have indicated), Elon Musk would face a $30 billion tax bill for his gains this year!!

And BKKT soaring over 160% on its partnership with Mastercard on crypto rollout…

Bitcoin and Ethereum were both up today on the Mastercard news (and Neuberger Berman has linked up with BlockFi).

Bitcoin topped $63,500…

Source: Bloomberg

And Ethereum rallied back above $4200…

Source: Bloomberg

All the major US equity indices were higher today, led by Nasdaq and Small Caps. The Dow lagged but still closed green…

Record intraday (and closing) highs for The Dow and S&P today.

On a side-note, the S&P/TSX Composite rose again today – a record 14th straight daily gain (a record that stood for 102 years)…

All thanks to yet another major short-squeeze….

Source: Bloomberg

Utes and Financials lagged today while Consumer Discretionary and Energy ripped…

Source: Bloomberg

Treasuries were mixed today with yields lower across the curve aside from 30Y…

Source: Bloomberg

The yield curve (5s30s) steepened back into its recent range…

Source: Bloomberg

The dollar rallied on the day to the top of its recent narrow range…

Source: Bloomberg

WTI hit a new 7-year-high today above $85 before fading back into the red…

Gold jumped back above $1800…

Real yields dropped a little today, leaving room for a considerable move higher in gold still (to around $2000)…

Source: Bloomberg

Finally, the level of “greed” in the market is back at 2021 highs…


“probably nothing” – oh and don’t forget that the last time capital gains taxes were hiked significantly was 1987 (from 20% to 28%) and that didn’t end so well eh?

Tyler Durden
Mon, 10/25/2021 – 16:00

Author: Tyler Durden

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Energy & Critical Metals

Tesla Ditches Nickel and Cobalt in Move to Lithium Iron Phosphate (LFP) Batteries

China’s ongoing energy shortage starts to affect domestic battery materials production Tesla ditches nickel, cobalt as prices soar Pilbara Minerals’…

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  • China’s ongoing energy shortage starts to affect domestic battery materials production
  • Tesla ditches nickel, cobalt as prices soar
  • Pilbara Minerals’ (ASX:PLS) third spodumene auction unofficially scheduled for October 26
  • Weekly small cap standouts include Arizona Lithium (ASX:AZL) and QX Resources (ASX:QXR)

Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, and vanadium.


All eyes on Pilbara Minerals’ lithium auction

Unofficially scheduled for Tuesday October 26 is  Pilbara Minerals’ (ASX:PLS) third auction on the Battery Material Exchange (BMX) digital platform for 10,000t (SC5.2%) spodumene.

The second auction went off at an incredible $US2,440/t, singlehandedly sparking a historic 86.5% month-on-month increase for average spod pricing industry-wide.

Susan Zou, non-ferrous editor at Fastmarkets, says bids for the upcoming coming auction “will not be as aggressive”.

“While the market consensus is that spodumene tightness will not ease significantly in the short term – despite Pilbara Minerals now producing spodumene from the restarted former Altura lithium project – the bids for the upcoming auction will not be as aggressive as last time because the ascent of lithium prices in China has slowed after the week-long national holiday compared with September, while the shipment time is months away,” Zou said.


Tesla ditches nickel, cobalt as prices soar

Tesla posted record revenue and profits in third quarter.

Improved gross margins of 30.5% on its automotive business are an industry benchmark, but Tesla reckons it can do better.

Amid rising material costs, Tesla will switch all its standard range vehicles to lithium iron phosphate based (LFP) batteries.

LFP-based lithium-ion batteries are cheaper and safer than chemistries that use nickel and cobalt, but less energy dense.


The switch comes as lithium-ion battery chemical prices are on the rise.

Argus says its minimum 22% nickel sulphate assessment rose by 31% in the last six months to $US4,450-4,650 per tonne today.

Meanwhile, prices for minimum 20.5% cobalt sulphate have increased by 23% over the same period to $US5.59-5.77/lb.


Energy-starved China throttles battery materials production

China’s ongoing energy shortage has begun to affect domestic battery materials production, with several companies forced to scale back anode and cathode production in late Q3, according to Benchmark Mineral Intelligence.

China is grappling with a shortage of coal – which fuels most of its electricity supply – due in part to its trade war with Australia.

This has seen metals prices spike as power restrictions on industry are imposed.

“During China’s National Energy Commission meeting in mid-October, Premier Keqiang Li emphasised that extreme electricity cuts need to be corrected to ensure that the northern regions have secure usage of electricity for the winter, signifying that electricity restrictions within China might be relaxed at some stage in Q4,” Benchmark says.

“In the long-term, China seeks to guarantee resource security by addressing the structural issues behind the current electricity supply shortage.

“The government is pushing for an upgrade in coal-powered electricity infrastructure, diversification of energy sources, and mass adoption of energy storage technologies.”


Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, and vanadium are performing>>>

AZL Arizona Lithium 94 138 132 692 0.095 $ 137,622,511.52
BUX Buxton Resources 72 72 62 28 0.115 $ 9,387,824.81
TNG TNG Limited 52 60 30 14 0.125 $ 131,197,189.20
QXR Qx Resources Limited 50 125 50 59 0.027 $ 19,990,869.63
LKE Lake Resources 49 43 181 1375 0.87 $ 1,062,055,777.22
PNN PepinNini Minerals 42 24 100 177 0.54 $ 21,431,426.68
INF Infinity Lithium 40 75 11 119 0.21 $ 72,254,428.58
PVW PVW Res 40 115 200 180 0.42 $ 30,479,625.00
AGY Argosy Minerals 33 84 210 448 0.285 $ 312,567,926.00
CAE Cannindah Resources 32 133 302 1014 0.245 $ 121,937,265.54
EUR European Lithium 29 29 90 186 0.12 $ 111,424,488.42
LOT Lotus Resources 28 26 171 301 0.3525 $ 318,108,500.16
PAM Pan Asia Metals 26 22 311 259 0.575 $ 42,722,013.52
BSX Blackstone 24 48 90 78 0.675 $ 218,516,601.60
VUL Vulcan Energy 21 3 96 1107 13.94 $ 1,658,145,468.07
BOA Boadicea Resources 20 17 -23 0 0.21 $ 15,539,979.00
ARR American Rare Earths 20 24 121 75 0.21 $ 67,237,623.57
GLN Galan Lithium 19 29 57 819 1.24 $ 325,297,652.63
RLC Reedy Lagoon Corp. 19 7 35 138 0.031 $ 14,040,680.32
IXR Ionic Rare Earths 16 26 -9 207 0.043 $ 132,303,581.05
AAJ Aruma Resources 16 9 33 -15 0.096 $ 10,706,727.76
NTU Northern Min 15 23 29 47 0.053 $ 242,375,398.30
SRL Sunrise 13 21 -6 -26 2.04 $ 177,414,021.63
MNS Magnis Energy Tech 13 24 10 108 0.385 $ 357,832,300.21
LPI Lithium Pwr Int 13 56 59 121 0.43 $ 153,458,733.12
COB Cobalt Blue 12 36 13 295 0.435 $ 122,383,707.27
LEL Lithenergy 11 23     0.69 $ 30,150,000.00
LIT Lithium Australia NL 10 6 6 160 0.1325 $ 124,888,951.75
ARN Aldoro Resources 10 2 26 344 0.44 $ 37,133,707.38
INR Ioneer 9 11 99 256 0.695 $ 1,313,895,861.69
JRV Jervois Global 8 17 42 112 0.6075 $ 901,491,557.89
AUZ Australian Mines 8 13 18 77 0.026 $ 107,588,977.85
BRB Breaker Res NL 8 25 38 57 0.33 $ 105,898,301.93
NIC Nickel Mines Limited 8 9 -15 9 1.065 $ 2,653,355,648.81
LTR Liontown Resources 8 30 355 595 1.695 $ 3,210,779,681.76
IGO IGO Limited 8 7 41 125 9.78 $ 7,231,907,614.15
CLA Celsius Resource 7 12 -28 -17 0.029 $ 30,369,614.35
TKL Traka Resources 7 15 -12 -35 0.015 $ 9,331,618.41
GME GME Resources 7 7 19 53 0.075 $ 43,955,316.39
ARL Ardea Resources 7 14 0 7 0.525 $ 73,158,136.07
MRD Mount Ridley Mines 7 50 7 150 0.0075 $ 39,246,503.66
JRL Jindalee Resources 7 0 -16 298 2.59 $ 128,226,399.42
TLG Talga Group 7 8 14 61 1.555 $ 460,909,457.12
GL1 Globallith 6 4     0.415 $ 37,369,876.32
RNU Renascor Res 6 -5 47 1225 0.1325 $ 245,247,740.92
ASN Anson Resources 6 0 20 143 0.09 $ 88,448,243.17
QEM QEM Limited 6 24 -23 64 0.18 $ 20,416,199.94
ORE [nxtlink id="268668"]Orocobre Limited[/nxtlink] 6 3 48 238 9.16 $ 5,833,359,111.90
AOU Auroch Minerals 6 9 -5 19 0.185 $ 53,901,539.10
HAS Hastings Tech Met 6 21 54 119 0.285 $ 469,383,100.56
CXO Core Lithium 6 42 125 1050 0.575 $ 969,599,098.13
GW1 Greenwing Resources 5 -3 -16 97 0.295 $ 32,355,260.85
ADD Adavale Resource 5 -9 7 88 0.06 $ 19,231,521.12
SYA Sayona Mining 5 -12 288 1576 0.1625 $ 1,098,609,343.52
DEV Devex Resources 5 6 14 32 0.33 $ 98,506,869.44
LEG Legend Mining 4 12 -39 -44 0.073 $ 206,635,179.08
G88 Golden Mile Res 4 6 -46 -21 0.05 $ 8,892,953.06
BEM Blackearth Minerals 4 -11 -11 136 0.125 $ 26,087,432.04
ILU Iluka Resources 3 4 30 84 9.59 $ 3,990,798,085.06
ESR Estrella Res 3 -8 -29 -75 0.036 $ 41,833,574.64
ATM Aneka Tambang 3 10 10 10 1.1 $ 1,434,013.90
CTM Centaurus Metals 3 13 59 76 1.11 $ 384,976,538.24
LYC Lynas Rare Earths 3 3 34 145 7.13 $ 6,172,495,029.36
VML Vital Metals Limited 3 -1 -1 105 0.0595 $ 245,763,501.96
REE Rarex Limited 3 5 -2 -24 0.1025 $ 44,256,133.99
HXG Hexagon Energy 2 21 -25 69 0.086 $ 37,465,161.47
PAN Panoramic Resources 2 12 52 114 0.235 $ 481,964,790.94
LPD Lepidico 2 6 20 231 0.0265 $ 159,956,743.67
AML Aeon Metals . 2 0 -35 -55 0.056 $ 47,410,992.26
RFR Rafaella Resources 1 -12 -28 -37 0.079 $ 14,877,908.60
S2R S2 Resources 1 2 -43 -67 0.089 $ 31,717,362.10
OZL OZ Minerals 1 13 4 58 25.29 $ 8,324,691,576.35
CHN Chalice Mining 1 -2 4 135 6.9 $ 2,424,685,296.60
PLS Pilbara Min 0 -3 87 454 2.09 $ 6,205,808,124.56
MLS Metals Australia 0 0 -33 0 0.002 $ 10,477,114.72
SLZ Sultan Resources 0 6 -5 -33 0.18 $ 12,516,190.02
TON Triton Min 0 -3 -26 -36 0.032 $ 36,302,978.14
WKT Walkabout Resources 0 0 -43 11 0.195 $ 82,954,311.77
MRC Mineral Commodities 0 3 -36 -55 0.15 $ 77,573,641.93
AJM Altura Mining 0 0 0 0 0.07 $ 238,056,602.28
LML Lincoln Minerals 0 0 0 0 0.008 $ 4,599,869.49
AQD Ausquest Limited 0 -6 -15 -39 0.017 $ 13,994,227.13
MMC Mitremining 0       0.225 $ 5,958,722.00
ALY Alchemy Resource 0 -5 -17 -42 0.013 $ 10,923,956.10
TMT Technology Metals 0 -8 6 9 0.37 $ 71,816,002.34
SYR Syrah Resources 0 -3 1 135 1.115 $ 558,582,889.76
CWX Carawine Resources 0 5 -22 -41 0.2 $ 23,411,328.93
VRC Volt Resources 0 0 55 182 0.031 $ 84,728,868.96
BKT Black Rock Mining 0 17 50 289 0.21 $ 183,003,319.24
FGR First Graphene 0 17 -25 31 0.21 $ 121,026,616.92
HNR Hannans 0 19 391 391 0.034 $ 77,879,247.34
NWC New World Resources 0 11 -21 61 0.079 $ 126,920,495.68
AZS Azure Minerals 0 4 13 -14 0.36 $ 113,053,538.17
VIA Viagold Rare Earth 0 852 2339 10426 2 $ 166,624,808.00
MIN Mineral Resources. 0 -7 -4 72 43.21 $ 7,436,921,309.18
STK Strickland Metals -1 81 335 -22 0.087 $ 96,212,112.39
PEK Peak Resources -1 -6 -12 129 0.08 $ 155,053,661.96
VR8 Vanadium Resources -1 22 55 204 0.079 $ 37,013,989.92
EGR Ecograf Limited -2 -12 6 274 0.635 $ 285,707,746.47
PRL Province Resources -2 9 -23 1089 0.1575 $ 175,097,270.71
SRI Sipa Resources -2 -15 -18 -33 0.056 $ 11,229,754.09
MCR Mincor Resources NL -2 7 42 38 1.375 $ 653,823,670.50
POS Poseidon Nick -2 3 68 18 0.1025 $ 321,715,750.23
BHP BHP Group -2 -2 -20 4 37.93 $ 111,076,964,984.10
RBX Resource Base -3 -7 459 459 0.19 $ 7,590,041.15
RXL Rox Resources -3 0 -32 -56 0.38 $ 60,678,931.39
PGM Platina Resources -3 13 31 42 0.071 $ 32,144,293.31
PUR Pursuit Minerals -3 -29 -55 150 0.035 $ 31,858,473.14
PSC Prospect Res -3 6 178 271 0.445 $ 168,750,355.40
ARU Arafura Resource -3 45 21 107 0.2175 $ 333,238,676.38
HYM Hyperion Metals -3 -14 3 205 0.99 $ 139,112,491.00
GED Golden Deeps -4 14 -4 -22 0.0125 $ 9,310,217.28
GAL Galileo Mining -4 -11 -14 4 0.24 $ 42,025,301.25
AVL Aust Vanadium -4 9 4 100 0.024 $ 78,739,811.54
SGQ St George Min -4 3 -21 -47 0.071 $ 42,421,747.46
BMM Balkanminingandmin -4 -4     0.68 $ 23,075,000.00
FFX Firefinch -4 -6 78 199 0.5975 $ 601,926,599.30
MOH Moho Resources -5 -3 -25 -50 0.058 $ 6,506,350.33
PLL Piedmont Lithium -5 17 -4 104 0.805 $ 438,791,187.00
AXE Archer Materials -6 -28 76 199 1.51 $ 368,447,115.96
ESS Essential Metals -6 -8 106 110 0.1975 $ 43,959,695.19
FRS Forrestania Resources -6       0.38 $ 10,378,500.00
IPT Impact Minerals -7 -18 -22 -36 0.014 $ 30,356,923.79
NKL Nickelx -7 -37     0.135 $ 7,490,000.00
NMT Neometals -7 0 84 373 0.875 $ 474,345,582.54
EMH European Metals Hldg -7 -8 -4 198 1.34 $ 171,721,393.80
MLX Metals X -8 8 69 354 0.3725 $ 335,688,444.79
VMC Venus Metals -8 6 -9 -36 0.17 $ 25,683,376.11
ADV Ardiden -8 -15 -31 -73 0.011 $ 23,686,688.92
NVA Nova Minerals -9 7 3 -18 0.155 $ 277,455,821.34
CHR Charger Metals -9 -25     0.41 $ 13,132,724.35
SBR Sabre Resources -9 0 -17 -44 0.005 $ 8,446,568.25
CNJ Conico -10 -34 31 90 0.038 $ 38,008,165.21
QPM Queensland Pacific -10 -2 147 503 0.235 $ 325,347,151.44
CZN Corazon -10 0 0 -54 0.037 $ 10,152,702.68
MAN Mandrake Resources -10 14 -61 7 0.064 $ 31,511,737.62
RMX Red Mountain Mining -10 -10 -18 -40 0.009 $ 13,180,124.72
GBR Great Boulder Resources -10 20 400 144 0.18 $ 69,660,982.76
A8G Australasian Gold -10 66     0.58 $ 27,027,640.86
BAR Barra Resources -11 0 32 -26 0.025 $ 20,569,575.34
AVZ AVZ Minerals -11 16 73 268 0.32 $ 1,045,906,121.00
AR3 Australian Rare Earths -13 -19     0.8 $ 36,274,494.87



Weekly Small Cap Standouts


The recently rebranded lithium play is now up 94% over the past five days on no news.

AZL recently completed the spin-out of its gold and copper assets to Diablo Resources (ASX:DBO) to focus on its ‘Big Sandy’ lithium project in the US.

In response to a recent price query from the ASX, AZL also noted that lithium carbonate prices in China are trading at record highs in October.

The $163m market cap stock has gained an impressive ~850% year-to-date.




Gold focused QX has officially acquired a lithium project in the Pilbara, the hard rock capital of the world.

The explorer exercised an option to buy the ‘Turner River’ lithium project early, in advance of the due diligence period lapsing.

This reflects QXR’s confidence in the project’s prospectivity, QXR says.

It will also acquire the adjoining tenements for an extra $6000, which brings the total tenement position at Turner River from 45sqkm to 84sqkm.

“Following the recent site visit and after further reviews of the project’s geology and the surrounding prospects, we have taken the decision to not only exercise the Turner River option early but to expand our tenement holdings in the area by applying for some adjoining ground which looks equally as prospective,” QXR chairman Maurice Feilich says.

That recent site visit identified contained “numerous pegmatite dykes”. Encouraging start.

“Further site visits are planned, and we look forward to keeping shareholders updated on progress here and with respect to the ongoing work in Queensland,” Feilich says.


The post High Voltage: Tesla ditches nickel and cobalt, spotlight on Pilbara Minerals’ third spodumene auction appeared first on Stockhead.

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Author: Reuben Adams

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