Ground Breakers: Iron ore rises and falls on China news as miners open the week with a whimper
Only days after Chinese fiscal support for iron ore powered its biggest one-day lift in a fortnight, threatening to pull its chin above US$100/t again, a rare show of defiance from Chinese citizens has sent markets shaking.
Protests against China’s Covid-Zero policy have engulfed major cities in the Middle Kingdom, with the Singapore iron ore contract down 2.47% this morning to US$96.70/t.
China’s Covid lockdowns as cases rise have impacted mobility in the world’s second biggest economy, hurting demand for both metals and oil.
According to ANZ, steel demand remains weak, inventories at major mills in the middle of November rising 3.5%.
Stable gold prices around US$1750/oz powered Regis Resources (ASX:RRL) to a 3% plus gain.
But the iron ore majors were all red, leaving the materials sector down 1.66%.
Energy stocks slid 2.24% against a broader 0.52% fall for the ASX 200.
At least breaking even today, Pilbara Minerals (ASX:PLS) rebounded from a horrid Friday by announcing a JV with Calix (ASX:CXL) to develop a demo plant at its Pilgangoora lithium mine to produce a midstream salt.
Along with a downstream JV in Korea with POSCO, it is PLS’ first foray into value-added lithium products outside of the spodumene concentrate it currently sells at an extraordinary margin.
PLS will hold 55% of the JV, which will produce a lithium salt product by cleaner methods than conventional chemical conversion via calcining with 100% renewable power. The process also has the potential to process very fine spodumene concentrate with lower lithia grades than conventional converter feedstock.
“It’s a great privilege to enter this JV partnership with Calix. The Mid-stream project has the potential to be a game-changer for our industry,” PLS MD Dale Henderson said.
“If successful, we will be able to deliver a superior chemical intermediary product to market compared to spodumene concentrate.
“This intermediate product offers a higher concentration in lithium and less impurities whilst being produced through a new process that reduces CO2 emissions compared to the traditional process route for hard rock spodumene chemical conversion.
“This is world-first Australian technology, being developed by two great Australian companies on Australian soil, with the support of the Australian Government – this is an exceptional opportunity for all of us.”
An FID on the demo plant is targeted for the second quarter of 2023.