Phillip Lowe’s last RBA board meeting today, will they keep the cash rate on hold?
What are your thoughts regarding the direction of rates?
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Australian shares are poised to start the week higher, bolstered by oil’s rally and spot i
Australian shares are poised to open lower, with little direction from overseas. The RBA’s policy decision is set for 2.30pm.
ASX futures were down 19 points or 0.26 per cent to 7277 near 7.15am AEST.
The local currency edged higher; the Bloomberg dollar spot index was little changed.
On bitstamp.net, bitcoin was 1 per cent lower to $US25,770 at 7.15am AEST.
US markets were closed for Labor Day. Trading will resume tomorrow.
In a note, TD Securities said it, consensus and market pricing are all in line for the RBA to keep the cash rate on hold at governor Philip Lowe’s last board meeting.
“The run of recent data – Q2 wages, retail sales, employment and monthly CPI have come in below expectations and provide no compelling reason for the RBA to hike.”
St George economist Jameson Coombs said: “We will be looking for any signs that the Board has changed its assessment of the risks, as this will be key to policy moving ahead.”
Source: AFR
- Once a niche industry, lithium is now one of the biggest money-spinners in the resources space
- Majors who stayed away from the market in its formative years are now taking baby steps into the novel space as electric vehicle demand continues to rise
- Where in the yard are a host of the resources sector’s biggest dogs?
Is lithium going mainstream?
While it feels like it happened years ago for avid stock watchers, some of the world’s biggest companies still view a market largely known for medicinal uses and ceramics only a few years ago with suspicion.
That may be changing. Glencore, the world’s largest commodity trader and one of its biggest copper and coal producers, looks like it’s launching into the key electric vehicle metal — projected by industry leader Albemarle to see a fivefold increase in demand by 2030 — making an 11th hour bid to inject itself into the sale process for the Bald Hill lithium mine led by administrators McGrathNicol by taking up the debt of collapsed mine owner Alita Resources.
Chris Ellison’s MinRes (ASX:MIN) looks like it has won the day, securing a deal that administrators will put to the Supreme Court of WA in a liquidation process, though debt holder Austroid — knocked back in a DOCA attempt by the Foreign Investment Review Board in July — could yet prove a roadblock.
But Glencore’s unsuccessful attempt to stake its claim signals the strong interest from the mining industry’s blue chip players to get into the lithium business.
Yet not all of the big dogs of the mining world are convinced the sector is the Promised Land it appears.
Last year lithium stocks banked incredible margins as prices charged to unforeseen levels as a shortage of supply ran up against a 50% rise in electric vehicle sales.
Prices ran up to over US$80,000/t in China for downstream chemicals and US$8000/t for spodumene concentrate.
But they’ve since fallen to about US$30,000/t and US$3500/t respectively, still portending extraordinary margins for producers like Pilbara Minerals (ASX:PLS).
Majors who have been interested in getting a foot in the door in lithium now bemoan that valuations are too high for miners like Pilbara, which was worth just $600 million in March 2020 when lithium prices hit their floor.
It’s now worth $14.4 billion and even developers and explorers are tough to wrangle. Only an offer valuing Liontown Resources (ASX:LTR) at $6.6b ($3) has brought its Tim Goyder-led board to the table with Albemarle, having previously rejected a bid of $5.5b ($2.50) from its US suitor.
That will net Albemarle the $895m Kathleen Valley mine, due to enter production in mid-2024.
Azure Minerals (ASX:AZS), which has made the next major Pilbara lithium discovery at its Andover JV with Mark Creasy near Roebourne, knocked back major shareholder SQM’s roughly $1 billion offer for the pre-resource explorer.
So which global majors are making their own moves into lithium and who’s sitting on the sidelines?
Source:Stockhead
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