Commodity snapSHOT 06 March 2023^

Power inputs – price floors forming

Tom Price Ben Davis Yuen Low
+44 (0) 20 3100 2085 +44 (0) 20 3100 2083 +44 (0) 20 3100 2091
tom.price@liberum.com ben.davis@liberum.com yuen.low@liberum.com

Global prices for two key fuels used in base load power generation – Thermal Coal and
Natural Gas – have now fallen by 40-70% from their early Dec-23 peaks. The pullback is
on the demand-hit of an abating northern winter – compounded this year by other mainly
Europe-centric factors. Highly, positively correlated coal/gas price performances
themselves reflect efficient, mutual fuel substitution by major coal-/gas-fired power-gen
industries of Europe-Asia-Americas. It follows that we expect key prices in both these fuel
markets to begin reporting floors soon – as fuel trade/stocking activity reports minimum
levels – marking the year’s first shoulder season in global energy markets. Here, we list the
short-term drivers of global coal/gas prices + explain timing of floor formation + flag key
short-term risks of the global energy trades…

Shoulder seasons, explained Liberum’s price deck

mkt unit 2023e 2024e 2025e LT
Worldwide power demand peaks twice/year: Summer (air-conditioning) and real
Winter (heating); those periods between these peaks = ‘shoulder seasons’. copper $/t 6,698 6,635 6,800 5,950
aluminium $/t 2,025 1,900 1,950 1,720
zinc $/t 2,775 2,675 2,500 2,075
Floor formation nickel $/t 16,425 15,400 15,200 13,185
Coal/gas prices have dropped faster/earlier than expected for 2023, partly on alumina $/t 314 300 310 278
cobalt $/lb 25 23 22 19.0
Europe’s warm winter. We now see 3 x elements of price floor formation.
lithium $/kg 60.5 43.5 28.5 13.8
gold $/oz 1,633 1,625 1,617 1,408
2023’s key price risks silver $/oz 19 19 20 18
platinum $/oz 1,012 1,150 1,150 1,025
We list the key industry-specific risks – bullish and bearish – for global energy palladium $/oz 1,863 1,500 1,200 1,025
markets in 2023, rhodium $/oz 20,125 16,250 15,000 4,300
iron ore fines $/t cfr 86 89 85 58
Equity exposure HCC $/t fob 281 249 228 170
TC (6300) $/t fob 211 163 143 99
Coal-rich equities of our coverage – GLEN (buy, TP 670p) + pure-play TGA Brent $/bbl 84 75 75 75
(buy, TP 1680p) – have sold off on weakened prices; upside risk is emerging. WTI $/bbl 78 70 70 69
n-gas (US) $/mmBtu 5.60 5.20 4.92 3.53
Source: 6-Dec-22; LT real = 2022$
Thermal coal vs. Dutch TTF gas prices …low, tight range
NEWC 6 300
500 100
ARA 600 0
450 RB 5 500 90
400 Dutch TTF gas (rh s) 80
350 70
US$/MMBtu

300 60
US$/t

250 50
200 40
150 30
100 20
50 10
0 0
29-Apr-2 2
04-May-2 1

28-Feb-22

23-Feb-23
04-Jan-21

31-Oct-21

26-Oct-22
03-Jul-21

28-Jun-22
05-Mar-21

01-Sep-21

30-Dec-21

27-Aug-22

25-Dec-22

Source: Bloomberg, Liberum

This document is a marketing communication and has been prepared and distributed by Liberum Capital Limited. This communication has not been prepared in accordance
with legal requirements under COBS 12 of the FCA Handbook designed to promote the independence of investment research and is not subject to a prohibition on dealing
ahead of the dissemination of investment research. However, Liberum is required by the FCA to have policies in place to identify and manage the conflicts of interest which
may arise in its production, which include preventing dealing ahead. Information regarding our policies is available, www.liberum.com. In addition, a list of items which
could create a conflict of interest and other material interests in relation to research material is set out on LCL’s website. For detailed disclosures, please refer to
www.liberum.com/legal For Reg-AC certification, see the end of the text. If this communication is distributed by another firm, it is considered independent third-party
research and additional information regarding such firm is provided at the end of this communication. Liberum does and seeks to do business with companies covered in
this communication. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this communication. Investors
should consider this communication as only a single factor in making their investment decision. ^Completed when first distributed.
 Commodity snapSHOT
06 March 2023

Power inputs – price floors forming

Just 4-5 months ago, global energy prices featured a war premium – as
the EU headed into its first winter without the once reliable supply of
cheap energy units from Russia. A European energy crisis seemed
inevitable, featuring high/volatile oil-gas-coal prices well into 2023…

Price performances, explained

…but it’s now late 1Q23, and the northern winter’s anxiety trade already
seems a distant memory. The EU’s expensive gas/coal inventory build of
2022, coupled with another strangely warm winter, minimised the seasonal hit
to the region’s economy. Winter’s now passing. The EU arguably possesses a
price-dragging surplus of energy units, which is reporting to fuel prices.
 Thermal Coal’s full range of high-profile seaborne prices (+5500cv) have
fallen 10-50% from early Dec-22’s peaks: Hardest hit, forwards/indices,
NEWC/ARA; most physical trades (~5500cv; NEWC; Kalm.; Colom.; QHD)
reported modest falls of ~10%; RB’s down >40% on poor deliveries too.
Spot range for >5500cv: US$103-138/t fob; NEWC6300, $193/t fob (1mth).
 Similarly, key Natural Gas prices worldwide (Henry Hub; Dutch TTF; UK)
have also dropped sharply from their Dec-22 highs, down 60-68%. They
too are holding to a relatively tight range of US$2-15/MMBtu (converted).

Figure 1: Thermal coal vs. Dutch TTF gas prices Figure 2: Key gas prices (US$/MMBtu)
Dutch TTF
500 100 100 10
NEWC 6 300 UK NBP
US$/MMBtu (reported/converted)

450 90 90 Shanghai LNG 9

ARA 600 0
400 RB 5 500 80 80 Henry Hub (rhs) 8
350 Dutch TTF gas (rh s) 70 70 7

HH (US$/MMBtu)
US$/MMBtu

300 60 60 6
US$/t

250 50 50 5
200 40 40 4
150 30 30 3
100 20 20 2
50 10 10 1
0 0 0 0
29-Apr-2 2
04-May-2 1

28-Feb-22

23-Feb-23
04-Jan-21

31-Oct-21

26-Oct-22
03-Jul-21

28-Jun-22
05-Mar-21

01-Sep-21

30-Dec-21

27-Aug-22

25-Dec-22

28-Nov-2 1

23-Nov-2 2
07-May-2 2
16-Feb-22

11-Feb-23
19-Oct-21

07-Jan-22

14-Oct-22

02-Jan-23
26-Jul-22
16-Jun-22
28-Mar-22

04-Sep-22

Source: Bloomberg Source: Bloomberg

Shoulder seasons
 Worldwide, there are two periods of peak power demand: Summer
(refrigeration/air-conditioning) and Winter (heating); energy markets
popularly call the periods between these peaks = ‘shoulder seasons’.
 For example, across Europe/northern Americas and Asia, the exit from the
northern winter (Dec-Feb) see power demand moderate; fuel-buying
moderates; fuel inventories are drawn low. At the same time in the
southern hemisphere, a similar abating market activity event is playing out,
post-Summer’s peak demand there (refrigeration/air-conditioning).
 It follows that milder temperatures of Spring/Autumn (again, for both
northern/southern hemispheres) feature relatively low fuel consumption
rates, weakest trading/stocking activities, etc. – occurring Mar-Apr (CY’s
1st ‘shoulder season’) and Aug-Sep (2nd).

2
Commodity snapSHOT
06 March 2023

Floor formation
 1Q23’s general decline in coal/gas prices is unremarkable, reflecting a
seasonal pullback in demand + destocking. The large scale and early
timing of this year’s event (i.e. Dec, not Feb) however, is probably a
function of a strangely warm European winter, compounded by the EU’s
war-prompted substantial strategic inventory build (~15% above normal).
We suspect that Europe’s unusual market conditions may have reported to
energy markets worldwide – a global price drag - via trade/industry
substitution (Europe's coal-gas prices vs. Brick Wall, 9-Jan-23).
 However, there is now some evidence that price floors may be forming in
coal/gas markets, after reporting many weeks of declines: 1. convergence
of key prices to a narrow range (i.e. vs. price levels; thermal coal: US$103-
138/t; natural gas: US$2-15/MMBtu); 2. rate of general price fall is
moderating; and, 3. price volatility is also moderating (Fig 1&2).
 Of course, the trade/industry behaviour shift that eventually underpins/lifts
these fuel prices from our current shoulder season-lows (i.e. Mar-Apr) – is
the start of pre-northern Summer (& pre-southern Winter) restocking of
power-gen fuels, including coal/gas (i.e. from May).
 What high frequency signals should we track, to determine the
scale/duration of a post-Apr seasonal uptick in activity? Focus on major
coal/gas trade flows (China; JKT; EU, via Netherlands); gas exports from
Qatar; coal-based freight rates covering exports from Indonesia/Australia
(post-wet season, Dec-Mar); US east coast; Colombia (i.e. we publish on
significant seasonal coal/gas trade shifts => just track our research).

2023 general Bull/Bear risks to coal/gas prices

BULL risks

 China’s central govt. may decide to boost the economy’s post-

lockdown recovery rate (i.e. via credit support for growth; expanded
project roll-outs, etc.; power demand lifts; China’s ~60% coal-fired);
 Russia’s coal/gas exports to West shrinks (~5% of global trade), its
ability to switch trade flows to new markets is limited by underinvested
rail/port infrastructure + shipping; also, collapse of western spare parts
supply chain for local industry threatens production/exports rates.
 flipside, Europe activity in securing ex-Russia coal/gas creates new
competitive tension in Middle East (Qatar gas); Asia(coal; LNG) and the
US (coal; LNG); expected to intensify ahead of northern summer/winter
this year; Russia’s diversion to ‘friendly’ markets possibly offers some
trade displacement relief).
 another year of extended wet season constraints on Australia/Indonesia
production/exports (Dec-Mar), as was reported in 2022;
 similarly, another warm northern summer = extended refrigeration/air-
conditioning demand (i.e. this is not a weather forecast; just a
reasonable risk assessment, these days);
 on-going deterioration in mine supply investment ex-China (ESG-hit
funding of coal industry).

3
 Commodity snapSHOT
06 March 2023

Figure 3: EU's gas/coal prices (indices) vs. gas storage (%) Figure 4: EU's gas/coal prices (indices) vs. gas storage (%)
Dutch TTF Dutch TTF
1200 RB TC 100 1000 RB TC 100
EU% storage 90 900 EU% storage 90
1000
80 800 80
70 700 70
800

% storage

% storage
60 600 60
index

index
600 50 500 50
40 400 40
400
30 300 30
20 200 20
200
10 100 10
0 0 0 0
01-Jan-16

01-Jan-17

01-Jan-18

01-Jan-19

01-Jan-20

01-Jan-21

01-Jan-22

01-Jan-23

02-Jun-21

20-Oct-21

22-Jun-22

05-Oct-22

18-Jan-23
18-May-22
02-Feb-22

22-Feb-23
09-Mar-22
01-Jul-16

01-Jul-17

01-Jul-18

01-Jul-19

01-Jul-20

01-Jul-21

01-Jul-22

07-Jul-21
11-Aug-21
15-Sep-21

27-Jul-22
24-Nov-21
29-Dec-21

13-Apr-22

31-Aug-22

09-Nov-22
14-Dec-22
Source: Bloomberg Source: Bloomberg

BEAR risks

 China’s on-going lift in local raw coal output rate (govt. seeks to lift
output/boost inventories) undermines imported coal/gas
demand/prices; 2022’s total coal output of 4.4Bnt, +12%YoY.
 Indonesia’s Energy and Mineral Resources Ministry announced (13-Jan-
23) plans to expand exports by 4-5%YoY (>15Mtpa), threatening to
weigh on seaborne coal prices + gas prices (via substitution).
 China’s resumption of Australia’s coal trade (ban was imposed Dec-20;
trade resumed early 2023) may see some coal mining capacity re-
activated in 2023 (>20Mtpa, both markets); note, very short-term,
China’s re-engagement may lift prices briefly via competition vs.
Australia’s unchanged production/export rates.
 normalisation of China’s hydro capacity, after a drought-hit 2022; hydro
typically delivers ~15% of country’s total power-gen (China’s power
sector – an update, 27-Jan-23); in China’s southern grid, out-
performance of hydro automatically marginalises coal-/gas-fired power.

Figure 5: Price indices: key thermal coal vs. gas Figure 6: QHD5500 vs. 2022's contract/’green zone' (RMB/t)

140
180 0
NEWC 6 300
QHD 550 0
120
160 0 con tract cap
NEWC 5 500
100 RM B570/ t-upper
140 0
RM B510/ t-lower
US$/t fob

80 KAL 590 0
120 0
60 ARA 600 0 100 0
40 800
RB 5 500
20 600
Dutch TTF
0 400
02-Nov-2 2

17-Nov-2 2

15-Feb-23
03-Oct-22

18-Oct-22

01-Jan-23

16-Jan-23

31-Jan-23
02-Dec-22

17-Dec-22

27-Apr-1 9

21-Apr-2 0

16-Apr-2 1

11-Apr-2 2
02-May-1 8
02-Jan-18

30-Aug-18

28-Dec-18

25-Aug-19

23-Dec-19

19-Aug-20

17-Dec-20

14-Aug-21

12-Dec-21

09-Aug-22

07-Dec-22

Source: Bloomberg; 100 = 03-Oct-22 Source: Bloomberg

4
 Commodity snapSHOT
06 March 2023

Coal & Gas price forecasts (Policy fade, 6-Dec-22)

Figure 7: Thermal Coal - NEWC 6300 (US$/t fob Aust.) Figure 8: Natural Gas - NEWC 6300 (US$/t fob Aust.)
500 spot 10.0 spot
MCP MCP
450 9.0
Liberum Liberum
400 con s 8.0 con s
7.0
350
6.0
300
5.0
250
4.0
200
3.0
150
2.0
100 1.0
50 0.0
Jun-23

Jun-24

Jun-25

Jun-26
Mar-23

Mar-24

Mar-25

Mar-26
Sep-22

Dec-22

Sep-23

Dec-23

Sep-24

Dec-24

Sep-25

Dec-25

Sep-26

Jun-23

Jun-24

Jun-25

Jun-26
Mar-23

Mar-24

Mar-25

Mar-26
Sep-22

Dec-22

Sep-23

Dec-23

Sep-24

Dec-24

Sep-25

Dec-25

Sep-26
Source: Liberum, Bloomberg Source: Liberum, Bloomberg

Preferred coal equities

 Glencore (BUY, TP 670p) – its decision years ago to continue managing
its coal assets until reserves are exhausted and sites are rehabilitated, has
underpinned its dividend pay-out rate. As the DoJ investigation draws to a
close, a new pool of potential investors is set to emerge.
 Thungela (BUY, TP 1680p) – this pure thermal coal play continues to offer
exceptional value, as a global power demand recovery exposes the lack of
investment in coal supply. Expecting a combined £6.40 in dividends from
the next two sets of results. We have incorporated Ensham in our model.

Restocking Indicator, moves from SELL => HOLD, 3-Mar-23

 The Restocking Indicator has upgraded to HOLD, after reporting a sell
last month. Domestic demand has improved, although it is still being
outpaced by the expansion in finished inventories.

5
 Commodity snapSHOT
06 March 2023

WEEKLY CHART PACK

Figure 9: Year-to-date sector signal performances, ranked

-60%

-50%

-40%

-30%

-20%

-10%

10%

20%

30%

40%

50%
0%
HRC - US
molybdenum
hard coking coal
chrome conc.
antimony
HRC - EU
steel scrap - EU
vanadium pentoxide
alumina
iron ore - fines, China
carbon
Shanghai Composite Index
copper
HRC - China dom.
FTSE 100
ASX 200 Resources
steel scrap - China
Bloomberg World Mining Index
S&P 500
manganese ore
tungsten
zinc
ferro-chrome
LME Metals Index
gold
stainless steel - EU
NIKKEI 225
bauxite
aluminium
Precious Metals Index
ferro-vanadium
Dow Jones
crude oil - Brent
crude oil - Tapis
tin
ruthenium
crude oil - WTI
iridium
FTSE All-Share Mining Index
diesel (US) index
coke (China, dom.)
lead energy
platinum bulk/ferroalloys
caustic soda
precious metal
cobalt
nickel base metal
palladium
rhodium
Baltic Dry Bulk Index
lithium
thermal coal - NEWC 6300

Source: Bloomberg

6
 Commodity snapSHOT
06 March 2023

BASE METALS: Prices up on some ‘policy fade’ optimism (US Fed + China’s lockdown)

Figure 10: Base Metals' price indices (12mth rolling) Figure 11: Copper inventories vs LME price (kt, US$/t)

170 nickel 11,000 400

zi nc 10,500 350
150 lead 10,000
300
copper 9,500
130 alumini um 9,000 250
8,500 200
110
8,000 150
90 7,500
100
7,000
70 6,500 50
6,000 0
50

23-Nov-2 2
07-May-2 2
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22
18-Mar-22

03-Mar-23
08-Dec-21

15-Aug-22
02-Apr-2 2

28-Nov-2 2
02-May-2 2

26-Feb-23
29-Oct-22

27-Jan-23
01-Jul-22

31-Jul-22
01-Jun-22
03-Mar-22

30-Aug-22

29-Sep-22

28-Dec-22

LME SHFE COMEX Price (US$/t; L HS)

Source: LME, Bloomberg Source: LME, Comex, SHFE, Bloomberg

Figure 12: Aluminium inventories vs LME price (kt, US$/t) Figure 13: Nickel inventories vs LME price (kt, US$/t)

50,000 160
4,100 1,600
45,000 140
1,400
3,600 40,000 120
1,200
35,000 100
3,100 1,000
800 30,000 80
2,600 600 25,000 60

400 20,000 40
2,100
200 15,000 20
1,600 0 10,000 0

23-Nov-2 2
07-May-2 2
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22
18-Mar-22

03-Mar-23
23-Nov-2 2
07-May-2 2

08-Dec-21

15-Aug-22
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22
18-Mar-22

03-Mar-23
08-Dec-21

15-Aug-22

LME SHFE COMEX Price (US$/t; L HS) LME SHFE Price (US$/t; L HS)

Source: LME, Comex, SHFE, Bloomberg Source: LME, Comex, SHFE, Bloomberg

Figure 14: Zinc inventories vs LME price (kt, US$/t) Figure 15: Lead inventories vs LME price (kt, US$/t)
4,750 350 2,600 70
4,500 300 60
2,400
4,250
250 50
4,000 2,200
200 40
3,750
2,000
3,500 150 30
3,250 1,800
20
100
3,000 1,600 10
2,750 50
1,400 0
2,500 0
23-Nov-2 2
07-May-2 2
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22
18-Mar-22

03-Mar-23
08-Dec-21

15-Aug-22
23-Nov-2 2
07-May-2 2
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22
18-Mar-22

03-Mar-23
08-Dec-21

15-Aug-22

LME SHFE Price (US$/t; L HS) LME Price (US$/t; L HS)

Source: LME, Comex, SHFE, Bloomberg Source: LME, Comex, SHFE, Bloomberg

7
 Commodity snapSHOT
06 March 2023

PRECIOUS METALS: high/sticky US inflation = high/stable US Fed cash rate policy

Figure 16: Precious metals price indices Figure 17: Gold price vs. real rates (US TIPS-10yr yield)
2,100 -1.5
150
2,050
140 -1.0
2,000

US TIPS-10yr yield
gold price (US$/oz)
130 1,950 -0.5
120 1,900 0.0
110 1,850
100 1,800 0.5
90 1,750 1.0
80 1,700
1.5
70 1,650
60 1,600 2.0

28-Nov-2 1

23-Nov-2 2
07-May-2 2
16-Feb-22

11-Feb-23
19-Oct-21

07-Jan-22

14-Oct-22

02-Jan-23
26-Jul-22
16-Jun-22
28-Mar-22

04-Sep-22
23-Nov-2 2
07-May-2 2
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22
18-Mar-22

03-Mar-23
08-Dec-21

15-Aug-22

Axis Title
gold pr ice (US$ /oz) US TIPS (% ; rhs)
gold silver platinum palladiu m

Source: Bloomberg, Liberum Source: Bloomberg

Figure 18: Gold's CFTC CoT - non-commercial Figure 19: Silver's CFTC CoT - non-commercial

400 2,100 100

2,050 29
80
300 2,000
60 27
200 1,950
'000 of contracts

40 25
'000 of contracts

1,900
US$/oz

20 23

US$/oz
100 1,850
1,800 0
21
0 1,750 -20
19
1,700 -40
-100
1,650 -60 17
-200 1,600 -80 15
23-Nov-2 2
07-May-2 2
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22
18-Mar-22

03-Mar-23
08-Dec-21

15-Aug-22

23-Nov-2 2
07-May-2 2
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22
18-Mar-22

03-Mar-23
08-Dec-21

15-Aug-22

lon g short net position gold pr ice (rhs) lon g short net position silver price (rhs)

Source: Bloomberg; 1 contract = 100oz Source: Bloomberg; 1 contract = 5,000oz

Figure 20: Platinum & Palladium spot prices (US$/oz) Figure 21: Precious metals price indices (US$/oz)

3,300 1,200 3,500 25,000

3,100 1,150 23,000
3,000
2,900 1,100 21,000
2,700 1,050 19,000
2,500
Au + Pt + Pd

2,500 1,000 17,000

Rh

2,000 15,000
2,300 950
13,000
2,100 900 1,500
11,000
1,900 850
9,000
1,700 800 1,000
7,000
1,500 750
500 5,000
1,300 700
23-Nov-2 2
07-May-2 2
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22
18-Mar-22

03-Mar-23
08-Dec-21

15-Aug-22
Nov-2 2
May-2 2
Oct-21

Jan-22

Oct-22

Jan-23
Jun-22
Mar-22

Mar-23
Dec-21

Aug-22

palladiu m platinum (rhs) gold platinum Axis Titlepalladiu m rhodium (r hs)

Source: Bloomberg, Johnson Matthey Source: Bloomberg, Johnson Matthey, LBMA

8
 Commodity snapSHOT
06 March 2023

STEEL: signals worldwide are lifting off 4Q22’s floor = normalisation (i.e. not a bull-trend)

Figure 22: Key finished steel product prices (US$/t eqv.) Figure 23: Key scrap steel product prices (US$/t)
2,400 800

2,000 700

600
1,600
US$/t

US$/t
500
1,200
400
800 300

400 200
23-Nov-2 2

23-Nov-2 2
07-May-2 2

07-May-2 2
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23

19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22

26-Jun-22
18-Mar-22

03-Mar-23

18-Mar-22

03-Mar-23
08-Dec-21

15-Aug-22

08-Dec-21

15-Aug-22
Sth Eu rope HRC Nth Europe HRC HMS, Tan gshan demolition scrap, Germany EXW
US HRC comp. China dom. HRC HMS 1/2 80:20), Turkey HMS, India
China dom. reba r 25 mm Japan HRC H2, Japan Nth A mer ica #1 busheling

Source: Bloomberg, Kallanish Steel Source: Kallanish Steel

Figure 24: China's steel industry profitability - rebar Figure 25: China's steel industry profitability - HRC
1,000 6,000 1,000 6,000

total cost + rebar spot price (RMB/t)

total cost + rebar spot price (RMB/t)

800 5,000 800 5,000

gross profit (RMB/t)

gross profit (RMB/t)

600 600
4,000 4,000
400 400
3,000 3,000
200 200
2,000 2,000
0 0

-200 1,000 -200 1,000

-400 0 -400 0
28-Nov-2 1

23-Nov-2 2
07-May-2 2
16-Feb-22

11-Feb-23

28-Nov-2 1

23-Nov-2 2
19-Oct-21

07-Jan-22

14-Oct-22

02-Jan-23

07-May-2 2
26-Jul-22

16-Feb-22

11-Feb-23
16-Jun-22
28-Mar-22

19-Oct-21

07-Jan-22

14-Oct-22

02-Jan-23
26-Jul-22
16-Jun-22
28-Mar-22
04-Sep-22

04-Sep-22

gross profit rebar (rhs) total cost (rhs) gross profit HRC (rhs) total cost (rhs)

Source: Bloomberg; conversion cost = US$450/t Source: Bloomberg; conversion cost = US$450/t

Figure 26: China's scrap-to-ore price ratio Figure 27: China's crude/finished steel production (Mt/mth)
170 7.0 130
6.5
150 120
6.0
130 5.5 110
110 5.0
million tonnes
US$/t

100
ratio

4.5
90 4.0 90
70 3.5
3.0 80
50
2.5
70
30 2.0
23-Nov-2 2
07-May-2 2
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22
18-Mar-22
08-Dec-21

15-Aug-22

60
Apr-1 8

Nov-2 2
May-2 0
Feb-19

Oct-20

Jan-22
Jul-19

Jun-22
Mar-21
Sep-18

Dec-19

Aug-21

iron ore price scrap:ore ratio average ratio finished crude

Source: Bloomberg Source: Bloomberg

9
 Commodity snapSHOT
06 March 2023

STEEL RAW MATERIALS: ore/steel signals up on seasonal kick + China’s 2nd recovery

Figure 28: Seaborne iron ore prices Figure 29: Dalian ore prices: spot vs 3mth forward

300 200
import 50
premium
180 40
250 160 30
fines 62 %
140 20
200 fines 58 %
120 10

US$/t fob
lump 6 2%
US$/t cfr

100 0
150
80 -10
100 60 -20
40 import -30
50 20 discount -40
0 -50

23-Nov-2 2
07-May-2 2
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23
26-Jun-22
18-Mar-22

03-Mar-23
08-Dec-21

15-Aug-22
0
13-Apr-2 2
14-Nov-2 1
29-May-1 9

07-Feb-23
06-Oct-17

26-Oct-19

18-Jan-21

17-Jun-21
05-Mar-18

24-Mar-20
02-Aug-18

30-Dec-18

21-Aug-20

10-Sep-22

imp minu s dom (rhs) imports domesti c

Source: Custeel Source: Platts, Bloomberg

Figure 30: Iron ore grade differentials (% diff. vs. US$/t cfr) Figure 31: Seaborne's lump premium
160 % 70 60%
% diff. vs. 62% Fe US$/t cfr

140 % lump premium ($/t)

120 % 60 50%
lump premium (% )
100 % 50
40%
US$/t cfr China

80%
60% 40
30%
40% 30
20% 20%
0% 20
-20% 10%
10
-40%
0 0%
-60%
13-Apr-2 2
14-Nov-2 1
29-May-1 9

07-Feb-23
06-Oct-17

26-Oct-19

18-Jan-21

17-Jun-21
05-Mar-18

24-Mar-20
02-Aug-18

30-Dec-18

21-Aug-20

10-Sep-22

-10 -10%

14-Apr-2 2
15-Nov-2 1
30-May-1 9

08-Feb-23
07-Oct-17

27-Oct-19

19-Jan-21

18-Jun-21
06-Mar-18

25-Mar-20
03-Aug-18

31-Dec-18

22-Aug-20

11-Sep-22
58% 62% 65% 66%

Source: Custeel Source: Custeel

Figure 32: China's iron ore imports (Mt/mth) Figure 33: China's iron ore stocks at ports (Mt, weekly)
115 170
110
160 201 8
105
150 201 9
100
million tonnes

95 140 202 0
Mt

90
130 202 1
85
120 202 2
80

75 110 202 3
70
100
Nov-1 8

Nov-1 9

Nov-2 0

Nov-2 1

Nov-2 2
Jul-18

Jul-19

Jul-20

Jul-21

Jul-22
Mar-18

Mar-19

Mar-20

Mar-21

Mar-22

1
4
7
10
13
16
19
22
25
28
31
34
37
40
43
46
49
52

weeks

Source: Bloomberg Source: Antaike

10
 Commodity snapSHOT
06 March 2023

ENERGY: crude oil prices vs. weak demand; gas prices hit by Europe’s warm winter

Figure 34: Crude oil prices: Brent, WTI, Tapis, Dubai Figure 35: Crude oil's brand spreads (spot; US$/bbl)

140 20
130
10
120
0
110
US$/bbl

US$/bbl
100 -10
90
-20
80
-30
70
60 23-Nov-2 2 -40

28-Nov-2 1

23-Nov-2 2
07-May-2 2

07-May-2 2
16-Feb-22

11-Feb-23
19-Oct-21

27-Jan-22

04-Oct-22

12-Jan-23

19-Oct-21

07-Jan-22

14-Oct-22

02-Jan-23
26-Jul-22
26-Jun-22

16-Jun-22
18-Mar-22

03-Mar-23

28-Mar-22
08-Dec-21

15-Aug-22

04-Sep-22
WTI Br ent Tapis Br ent-WTI WTI-Dubai Br ent-Dubai

Source: Bloomberg Energy Source: Bloomberg Energy

Figure 36: Selection of natural gas prices (US$/MMBtu) Figure 37: Prices: coal vs. gas, compared
Dutch TTF
100 10 490 10
UK NBP
US$/MMBtu (reported/converted)

90 Shanghai LNG 9
440 9
80 Henry Hub (rhs) 8
390
70 7 8
HH (US$/MMBtu)

340
US$/t fob Aust.

60 6 7

US$/MMBtu
50 5 290
6
40 4 240
30 3 5
190
20 2 NEWC 6 300cv 4
140
10 1 RB 6 000cv
90 3
0 0 Henry Hub (rhs)
28-Nov-2 1

23-Nov-2 2
07-May-2 2
16-Feb-22

11-Feb-23
19-Oct-21

07-Jan-22

14-Oct-22

02-Jan-23
26-Jul-22
16-Jun-22
28-Mar-22

40 2
04-Sep-22

Nov-2 2
May-2 2
Oct-21

Jan-22

Oct-22

Jan-23
Jun-22
Mar-22
Dec-21

Aug-22

Source: Bloomberg Source: Bloomberg

Figure 38: Thermal coal's flagship seaborne prices (US$/t) Figure 39: China's power production (TWh/month)

490 1,700 700

440 600
1,500
630 0 NEWC
390
US$/t fob Aust. NEWC

550 0 QHD 1,300 500

340
RMB/t fob QHD

1,100 400 coal

290
hydro
240 900 300 nuclear
wind
190 200 othe r
700
140
100
500
90
0
40 300
Jan-20

Jan-21

Jan-22
Jul-19

Jul-20

Jul-21

Jul-22
Apr-2 2
Nov-2 1
May-1 9
Feb-18

Feb-23
Oct-19

Jan-21
Jul-18

Jun-21
Mar-20
Sep-17

Dec-18

Aug-20

Sep-22

Source: China Coal Resource Source: NBS

11
 Commodity snapSHOT
06 March 2023

Commodity vs. Macro: CB inflation-targeting + China’s covid-controls = fading policies

Figure 40: China's GDP growth rate (qrtly, YoY%) … 2022 Figure 41: US & EU GDP growth rate (qrtly, YoY%) …while,
reported growth of 3.0%; set to lift in 2023 US/Europe growth rates report some stability

20 10
8
15 6
4
10
2
5 0
-2
0
-4
US
-5 -6
EU
-8
-10 -10
Apr-0 3

Apr-0 8

Apr-1 3

Apr-1 8
Dec-99

Aug-01

Dec-04

Aug-06

Dec-09

Aug-11

Dec-14

Aug-16

Dec-19

Aug-21

Apr-0 3

Apr-0 8

Apr-1 3

Apr-1 8
Dec-99

Aug-01

Dec-04

Aug-06

Dec-09

Aug-11

Dec-14

Aug-16

Dec-19

Aug-21
Source: NBS Source: OECD

Figure 42: China's manufacturing PMI …weak, ~50 Figure 43: Manufacturing PMI: US-Europe-Global

60 70

65
55
60

55
50
50
45 45

40 US
official PMI
40 EU
Caixin PMI 35 Global

35 30
Apr-2 0

Apr-2 1

Apr-2 2
Oct-20

Jan-21

Oct-21

Jan-22

Oct-22

Jan-23
Jul-20

Jul-21

Jul-22
Jun-06

Jun-11

Jun-16

Jun-21
Mar-05

Mar-10

Mar-15

Mar-20
Sep-07

Dec-08

Sep-12

Dec-13

Sep-17

Dec-18

Sep-22

Source: CFLP, Markit Source: Markit

Figure 44: CPI: China-US-EU (mthly, YoY%) …collapsing Figure 45: Credit flow vs. GDP: China-US-EU (mthly, YoY%)
energy prices took all CPIs lower; US/China’s CPI lifting on …recovering GDP growth vs. stable credit flow, now weighing
rising economic activity… on impulses across major economies…
US
3.0 25
EU
US 20
2.5 China
EU
2.0 15
China
1.5 10

1.0 5

0.5 0

0.0 -5
-10
-0.5
-15
-1.0
-20
-1.5
17-Nov-1 1

01-Nov-1 2
01-Jan-09

17-Oct-13

02-Oct-14

18-Jul-19

02-Jul-20

17-Jun-21

02-Jun-22
17-Dec-09

02-Dec-10

17-Sep-15

01-Sep-16

17-Aug-17

02-Aug-18
Nov-1 9

Nov-2 0

Nov-2 1

Nov-2 2
May-2 0

May-2 1

May-2 2
Feb-20

Feb-21

Feb-22

Feb-23
Aug-20

Aug-21

Aug-22

Source: Bloomberg Source: Bloomberg; credit impulse = credit issued as % of GDP

12
 Commodity snapSHOT
06 March 2023

Figure 46: China's credit impulse vs. new loans (monthly, Figure 47: China's money supply - M2 (mthly, RMBbn;
YoY%; RMBbn/mth) …new loans’ seasonal kick reporting… YoY%) …+money supply’s up a bit too, but still subdued.

6,000 25 300 30%

20 M2
5,000 new loan s 250
YoY %ch g 25%
credit impulse (rhs) 15

M2 (YoY%chg)
4,000 200

M2 (RMBbn)
10 20%
3,000 5 150

0 15%
2,000 100
-5
10%
1,000 50
-10

0 -15 0 5%

15-Apr-1 2
17-Nov-1 1

01-Nov-1 2

10-Nov-1 8
20-May-1 3
05-Feb-10

22-Feb-22
01-Jan-09

17-Oct-13

02-Oct-14

01-Jan-09

06-Oct-17

18-Jan-21
18-Jul-19

02-Jul-20

29-Jul-15
17-Jun-21

02-Jun-22

24-Jun-14
12-Mar-11
17-Dec-09

02-Dec-10

17-Sep-15

01-Sep-16

17-Aug-17

02-Aug-18

01-Sep-16

15-Dec-19
Source: Bloomberg Source: Bloomberg

Figure 48: China's new orders/new exports PMI …new Figure 49: China's export/import trade rate (monthly, YoY%)
orders up, confirming seasonal uptick… …but broader trade signals appear weak/directionless…

70 100
new orders exports
65 80
new exports imports
60 60
55
40
50
20
45
0
40
35 -20

30 -40

25 -60
Jun-06

Jun-11

Jun-16

Jun-21
Mar-05

Mar-10

Mar-15

Mar-20
Sep-07

Dec-08

Sep-12

Dec-13

Sep-17

Dec-18

Sep-22

Apr-2 0
Nov-1 9
May-1 7

May-2 2
Feb-21
Oct-17

Jan-19

Oct-22
Jul-21
Jun-19
Mar-18
Dec-16

Aug-18

Sep-20

Source: CFLP, Bloomberg Source: CGAPRC, Bloomberg Dec-21

Figure 50: China's FAI, by sector (YTD YoY%) …an FAI Figure 51: China's property new starts/completions …as
bounce, has failed to lift property… China’s key property sector remains under pressure

50 300 50%
40 40%
250
30 30%
20 200 20%
10 10%
150
0 0%
-10 100 -10%
-20 -20%
manufacturin g new star ts (m units; lhs)
infrastructure 50
-30 completion s (YTD YoY% ) -30%
real estate
-40 0 -40%
Apr-2 0
Nov-1 9
May-1 7

May-2 2
Feb-21
Oct-17

Jan-19

Oct-22
Jul-21
Jun-19
Mar-18
Dec-16

Aug-18

Sep-20

Dec-21

Nov-0 9

Nov-1 4

Nov-1 9
May-1 2

May-1 7

May-2 2
Feb-11

Feb-16

Feb-21
Aug-13

Aug-18

Source: NBS, Bloomberg Source: NBS, Bloomberg

13
 Commodity snapSHOT
06 March 2023

Top Equity Picks – Ben Davis & Yuen Low

We have revised our commodity price deck, and estimates across our equity
coverage (Subdued from Q2’23 – Extreme bear case removed, Davis & Low,
6-Dec-22). Earnings momentum for producing companies on a twelve-month
outlook is poor. So, unless they offer exceptional value (Glencore, Thungela)
or promise a re-rate catalyst (Emmerson, Gemfields, Trident Royalties), we
would avoid engaging.

Most preferred: GLEN, TGA, TRR, SHG, EML, FAR

Glencore (BUY, TP 670p) – continues to enjoy the strategic missteps of its
competitors exiting coal, choosing instead to take the important responsibility
of running the assets down. As DoJ investigation draws to a close, new pool
of possible investors enter the mix.

Thungela (BUY, TP 1680p) – this pure thermal coal play continues to offer
exceptional value, as a global power demand recovery exposes the lack of
investment in coal supply. We have incorporated Ensham in our model.

Trident Royalties (BUY, TP 74p) – defensive play with no cost inflation

exposure. Major catalysts in the next twelve months from its Thacker Pass
and Sonora royalties could see a major re-rate.

Shanta Gold (BUY, TP 17p) – best UK gold exposure, featuring bullish

catalysts over next 6-12mths from its three assets; of these, the West Kenya
project is delivering excellent drill results.

Centamin (BUY, TP 120p) – results from the capital structure review

(currently expected late 2022/early 2023) could see the shares soften if the
divi has to be cut. We would regard this as an entry opportunity, as we believe
several materially-positive catalysts could emerge over the coming months.

Atlantic Lithium (BUY, TP 57p) – earn-in and offtake agreements with

Piedmont Lithium significantly reduce financial and commercial risks. A DFS
should be completed during H1’23. Using spot prices (or even, say, half that),
our valuation would be multiples of our current conservative target price.

Caledonia (BUY, TP 1305p) – one of Africa’s lowest-cost gold producers and

a reliable dividend payer. If the conditional acquisition of the Bilboes project is
successfully completed, attributable production could eventually be
quadrupled.

Emmerson (BUY, TP 13p) – we are hopeful that the environmental permit will
be received within the next few weeks, enabling construction to commence in
H2’23. Strategic investor Sinar Mas recently invested a further US$6m and
extended its cornerstone financing commitment to Sept’23.

Ferro-Alloy Resources (BUY, TP 38p) – backed by Sir Mick Davis, via his
Vision Blue vehicle. We view the recent share price weakness as representing
an attractive entry opportunity ahead of a period of significant de-risking,
during which a range of catalysts could emerge.

14
 Commodity snapSHOT
06 March 2023

Least preferred: ANTO, RIO and BHP

Antofagasta (SELL, TP 930p) – pure play copper exposure. Chilean current
proposal of floating rates on royalties has potential to significantly reduce
investors exposure to copper price upside but maintain downside risks.

Rio Tinto (SELL, TP 3725p) – despite the stock’s significant

underperformance over the past 18 months vs. other Majors, we still see little
reason to own it. Negative earnings momentum of -30% from spot to 2023
earnings and no clear positive equity catalysts.

BHP (SELL, TP 2130p) – a more interesting story here than for Rio Tinto, with
coking coal earnings underpinned by a strong thermal coal market. However,
earnings momentum is still strongly negative (-28% to CY2023 from spot).

Sector valuations, spot earnings & ratings

Figure 52: Spot EBITDA momentum (100 = Jan-2021) Figure 53: Share price indices (100 = Jan-2021)

350 300

300
250
250

200 200

150 150
100
100
50

0 50
Jan-21 May-2 1 Sep-21 Jan-22 May-2 2 Sep-22 Jan-23 Jan-21 May-2 1 Sep-21 Jan-22 May-2 2 Sep-22 Jan-23

BHP RIO AAL GLEN BHP RIO AAL GLEN

Source: Liberum, Bloomberg Source: Liberum, Bloomberg

Figure 54: EV/EBITDA, indexed (100 = Jan-2021) Figure 55: EV/EBITDA, absolute

250 7x

6x
200

5x
150
4x
100
3x

50
2x

0 1x
Jan-21 May-2 1 Sep-21 Jan-22 May-2 2 Sep-22 Jan-23 Jan-21 May-2 1 Sep-21 Jan-22 May-2 2 Sep-22 Jan-23

BHP RIO AAL GLEN BHP RIO AAL GLEN

Source: Liberum, Bloomberg Source: Liberum, Bloomberg

15
 Commodity snapSHOT
06 March 2023

Figure 56: BHP share price vs spot EBITDA (last 90 days) Figure 57: RIO share price vs spot EBITDA (last 90 days)

47,000 3,100 33,000 6,800

2,900 31,000
42,000 6,300
29,000
2,700
37,000 27,000 5,800
2,500 25,000
32,000 5,300
23,000
2,300
21,000
27,000 4,800
2,100
19,000

22,000 1,900 17,000 4,300

Dec-22 Jan-23 Feb-23 Dec-22 Jan-23 Feb-23

Spot EBITDA ($m) Share pr ice (p, RHS) Spot EBITDA ($m) Share pr ice (p, RHS)

Source: Liberum, Bloomberg Source: Liberum, Bloomberg

Figure 58: GLEN share price vs spot EBITDA (last 90 days) Figure 59: AAL share price vs spot EBITDA (last 90 days)

39,000 600 21,000 3,800

37,000 580
20,000 3,600
560
35,000 3,400
19,000
540
33,000 3,200
520 18,000
31,000 3,000
500
17,000
29,000 2,800
480
16,000 2,600
27,000 460

25,000 440 15,000 2,400

Dec-22 Jan-23 Feb-23 Dec-22 Jan-23 Feb-23

Spot EBITDA ($m) Share pr ice (p, RHS) Spot EBITDA ($m) Share pr ice (p, RHS)

Source: Liberum, Bloomberg Source: Liberum, Bloomberg

Figure 60: BHP – CY23 EBITDA vs. commodity, at spot Figure 61: RIO – CY23 EBITDA vs. commodity, at spot

nickel aluminium diamonds

copper 1% 11% 1%
25%

copper
iron ore 15%
coking 54%
coal
20% iron ore
72%

Source: Liberum Source: Liberum

16
 Commodity snapSHOT
06 March 2023

Figure 62: GLEN – CY23 EBITDA vs. commodity, at spot Figure 63: AAL – CY23 EBITDA vs. commodity, at spot

marketing platinum nickel

16% 17% 3%
iron ore
thermal 29%
coal
zinc 32%
12%
diamonds
6%
nickel
5%

coking
coking copper coal
cobalt coal 25% 20%
5% copper 8%
22%

Source: Liberum Source: Liberum

Figure 64: Sector valuations, on Liberum assumptions & spot …as at 3-Mar-23
EV/EBITDA Operating FCF Yield FCF Yield Dividend yield EBITDA (% upside
to cons.)
2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024
Liberum
BHP 6.8x 7.3x 7.9x 8% 8% 7% 6% 5% 6% 4% 4% 4% -13% -24%
Rio Tinto 6.8x 6.8x 6.8x 7% 7% 7% 4% 3% 3% 3% 3% 3% -21% -21%
Glencore 4.6x 5.9x 7.0x 12% 9% 9% 15% 10% 7% 9% 6% 7% -7% -21%
Anglo American 4.7x 4.8x 5.3x 8% 8% 7% 4% 3% 2% 4% 4% 4% -10% -6%

Antofagasta 13.9x 12.3x 11.0x 3% -5% -4% 2% 2% 2% 0% 1% 1% -48% -47%

Ferrexpo 2.6x 0.8x 0.5x 23% 65% 77% 10% 31% 57% 7% 26% 45% 60% 53%
Thungela 0.7x 1.1x 1.3x 42% 26% 23% 37% 24% 19% 47% 34% 27% 25% 20%
Trident Royalties 26.4x 7.2x 5.1x 4% 10% 15% 4% 10% 15% 0% 0% 0% -59% -4%

Endeavour 7.2x 5.6x 4.7x 17% 18% 22% 7% 10% 16% 4% 4% 4% -29% -15%
Centamin 4.1x 4.4x 4.9x 21% 21% 24% 15% 8% 8% 5% 4% 3% -6% -10%
Sylvania Platinum 1.5x 1.4x 1.3x 26% 20% 16% 25% 23% 18% 9% 11% 10% 4% 1%
Caledonia 3.0x 4.6x 7.0x 21% 18% 19% 14% -21% -58% 4% 4% 4% -13% -5%
Shanta Gold 2.6x 1.9x 1.5x 24% 27% 26% 13% 21% 20% 2% 2% 2% 10% -7%
Gemfields 1.8x 2.1x 1.7x 24% 27% 41% 23% -10% 24% 16% 12% 14% -12% -6%

Marked-to-market
BHP 4.1x 3.9x 3.7x 14% 14% 14% 11% 12% 13% 8% 8% 8% 8% 38%
Rio Tinto 4.4x 4.1x 3.9x 12% 13% 14% 9% 9% 10% 5% 6% 6% 19% 23%
Glencore 4.1x 4.3x 4.3x 14% 15% 17% 12% 14% 16% 9% 9% 13% 6% 10%
Anglo American 3.4x 3.1x 2.9x 14% 17% 18% 9% 11% 12% 7% 7% 8% 20% 38%

Antofagasta 5.4x 5.5x 5.2x 8% 0% 1% 2% 2% 2% 3% 3% 4% 31% 18%

Ferrexpo 1.3x 0.7x 0.5x 40% 64% 66% 18% 39% 47% 7% 34% 37% 170% 60%
Thungela 1.2x 1.2x 1.0x 22% 23% 28% 19% 18% 21% 31% 32% 35% -16% 16%
Trident Royalties 20.0x 5.5x 2.9x 5% 13% 23% 5% 13% 23% 0% 0% 0% -47% 21%

Endeavour 5.8x 4.0x 3.1x 20% 23% 28% 10% 15% 22% 4% 4% 5% -14% 11%
Centamin 3.2x 3.1x 3.3x 27% 28% 32% 20% 16% 17% 10% 9% 4% 17% 20%
Sylvania Platinum 3.6x 11.3x 8.1x 8% 2% 5% 18% 2% 6% 9% 7% 2% -23% -85%
Caledonia 2.1x 2.7x 4.2x 26% 25% 27% 20% -13% -50% 4% 4% 4% 15% 40%
Shanta Gold 1.8x 1.0x 0.4x 34% 39% 39% 22.5% 33.0% 34% 2% 2% 2% 42% 31%
Gemfields 1.6x 1.9x 1.6x 26% 28% 42% 26% -9% 25% 16% 12% 14% -8% -2%

Source: Liberum, Bloomberg; BHP EPS upside compared to June Y/E consensus

17
 Commodity snapSHOT
06 March 2023

Figure 65: Summary table – Resources Equities …as at 3-Mar-23

rating target price (p) share price (p) %-diff. DY (2022) TSR (%) mkt cap ($m) net debt ($m) EV ($m)
BHP Sell 2130 2686 -21% 4.4% -16.3% 163,009 2,845 169,664
Rio Tinto Sell 3725 6018 -38% 3.0% -35.1% 121,891 2,043 126,033
Glencore Buy 670 511 31% 8.5% 39.6% 77,398 16,953 90,160
Anglo American Hold 2725 2989 -9% 4.5% -4.4% 43,875 6,128 56,666

Antofagasta Sell 930 1621 -43% 0.4% -42.2% 19,145 1,065 23,227
Ferrexpo Buy 250 147 70% 7.5% 77.1% 1,039 -159 880
Thungela Buy 1680 945 78% 46.6% 124.4% 1,591 -50 1,659
Trident Royalties Buy 74 56 33% 0.0% 33.3% 194 -18 175
Endeavour Hold 1233 1762 -30% 3.9% -26.1% 5,225 -102 5,587
Centamin Buy 120 105 15% 4.5% 19.1% 1,451 -107 1,303
Sylvania Platinum Buy 150 104 44% 9.5% 53.7% 332 -143 189
Caledonia Buy 1305 1105 18% 4.2% 22.3% 228 -50 197
Shanta Gold Buy 17 11 51% 1.8% 52.9% 142 -1 141

Gemfields Buy 27 19 46% 15.7% 61.6% 269 -157 192

Atlantic Lithium Buy 57 39 46% 0.0% 45.6% 284 -24 260
Ferro Alloys Buy 38 10 264% 0.0% 263.6% 41 -1 40
Emmerson Buy 13 5 155% 0.0% 155.4% 61 -10 51

Source: Liberum, Bloomberg

Figure 66: Global commodity prices: spot vs. forecasts …as at 3-Mar-23
commodity/currency units spot Liberum consensus consensus Liberum
vs. spot vs.
consensus
2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025
Base Metals
aluminium USc/lb 107 92 86 88 113 115 117 5% 7% 9% -18% -25% -24%
copper USc/lb 405 304 301 308 379 378 381 -6% -7% -6% -20% -20% -19%
lead USc/lb 96 86 86 85 94 93 90 -2% -4% -7% -9% -8% -5%
nickel US$/lb 10.97 7.45 6.99 6.89 10.79 9.76 9.50 -2% -11% -13% -31% -28% -27%
zinc USc/lb 139 126 121 113 139 133 126 0% -4% -10% -10% -9% -10%
Precious Metals
gold US$/oz 1,836 1,691 1,625 1,617 1,813 1,808 1,741 -1% -2% -5% -7% -10% -7%
silver US$/oz 20.90 18.95 19.20 19.75 22.31 22.59 22.01 7% 8% 5% -15% -15% -10%
platinum US$/oz 962 1,025 1,150 1,150 1,069 1,160 1,214 11% 21% 26% -4% -1% -5%
palladium US$/oz 1,438 1,863 1,500 1,200 1,832 1,742 1,553 27% 21% 8% 2% -14% -23%
rhodium US$/oz 9,600 20,125 16,250 15,000
Bulks
hard coking coal US$/t 362 281 249 228 270 233 208 -26% -36% -43% 4% 7% 9%
thermal coal US$/t 193 211 163 143 283 210 154 47% 9% -20% -25% -23% -7%
iron ore (fines) - CFR 62% US$/t 127 86 89 85 106 93 88 -17% -27% -31% -18% -5% -3%
Dampier - Qingdao US$/t 7 9 10 9 9 7 6 33% 7% -18% 3% 35% 66%
lump premium US$/t 7 17 18 17 9 11 13 27% 71% 87% 102% 55% 36%
Energy
crude oil - Brent $/bbl 85 80 73 75 90 87 82 6% 3% -3% -11% -16% -9%
crude oil - WTI $/bbl 78 75 68 70 85 83 79 9% 7% 2% -12% -18% -12%
natural gas - HH $/MMBtu 2.70 5.60 5.20 4.92 4.45 4.34 4.48 65% 61% 66% 26% 20% 10%
FX
Australian Dollar USD/AUD 0.67 0.67 0.68 0.69 0.77 0.79 0.78 14% 17% 16% -14% -14% -12%
Canadian Dollar CAD/USD 1.36 1.35 1.35 1.35 1.27 1.27 1.26 -7% -7% -7% 7% 6% 7%
South African Rand ZAR/USD 18.2 17.7 17.8 17.9 15.2 16.4 17.1 -16% -10% -6% 16% 9% 5%

Source: Liberum, Bloomberg

18
 Commodity snapSHOT
06 March 2023

Figure 67: Next 12mths: seek PGMs/gold; avoid Rust/Energy Figure 68: Next 5yrs: Precious = long-term defensive too
60% 40%
Dec-23, 12-month outlook vs. Dec-22
50% 2027, 5-year outlook vs. 2022
20%
40%
30% 0%
20%
10% -20%
0% -40%
-10%
-20% -60%
-30%
-80%
-40%
-50% -100%
silver

silver
cobalt

lead
WTI crude
cobalt
manganese ore

lead
steel scrap
steel (HRC)

WTI crude

manganese ore

steel scrap
steel (HRC)
alumina

thermal coal

iron ore - fines

molybdenum

alumina

molybdenum
iron ore - fines

thermal coal
gold

gold
uranium

iron ore - lump

uranium

iron ore - lump

platinum

platinum
hard coking coal

palladium

copper
aluminium

natural gas

nickel

palladium
hard coking coal

lithium
rhodium

tin

natural gas

copper

lithium
zinc

aluminium

nickel

zinc

tin
Brent crude

Brent crude

rhodium
Source: Liberum, Bloomberg, 6-Dec-22 Source: Liberum, Bloomberg, 6-Dec-22

Liberum’s commodity price forecasts

Figure 69: Liberum’s latest commodity price forecasts
commodity unit Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 2021 2022 2023 2024 2025 2026 2027 LT price
act. act. act. est. est. act. act. est. est. est. est. est. 2022$ real

copper $/tonne 9,536 7,767 8,030 6,750 6,700 9,313 8,832 6,698 6,635 6,800 6,800 6,667 5,950
aluminium $/tonne 2,882 2,356 2,336 2,100 2,050 2,473 2,707 2,025 1,900 1,950 1,950 1,927 1,720
zinc $/tonne 3,925 3,281 3,008 2,800 2,800 3,004 3,487 2,775 2,675 2,500 2,450 2,400 2,075
nickel $/tonne 29,018 22,105 25,581 19,000 16,000 18,448 26,263 16,425 15,400 15,200 15,000 15,000 13,185
lead $/tonne 2,200 1,976 2,110 1,900 1,850 2,199 2,153 1,888 1,890 1,875 1,875 1,830 1,602
tin $/tonne 36,875 23,716 21,631 20,000 21,000 32,380 31,359 20,750 21,500 21,000 20,000 19,500 17,100

alumina US$/tonne, spot fob Aust. 377 339 319 325 320 327 362 314 300 310 315 317 278
ferrochrome US$/lb, China 1.14 0.90 0.91 0.90 0.90 1.07 1.01 0.93 1.05 1.05 1.05 1.05 0.94
molybdenum $/lb 18.48 15.96 20.78 15.00 14.00 15.72 18.57 12.95 10.60 10.40 10.28 10.10 8.78
cobalt $/lb (99.8%) 35.0 23.6 23.3 25.0 25.0 23.3 28.9 24.9 22.8 22.4 22.1 22.5 19.0
lithium $/tonne, cif China 71,595 70,946 78,636 65,000 60,000 18,593 71,605 60,500 43,500 28,500 18,750 16,500 13,800

gold $/oz 1,873 1,728 1,731 1,635 1,635 1,799 1,802 1,633 1,625 1,617 1,609 1,607 1,408
silver $/oz 22.63 19.24 21.33 19.00 19.00 25.15 21.81 18.95 19.20 19.75 19.85 20.25 17.9
platinum $/oz 966 892 982 1,002 1,022 1,096 968 1,025 1,150 1,150 1,188 1,149 1,025
palladium $/oz 2,114 2,088 1,952 1,950 1,900 2,410 2,125 1,863 1,500 1,200 1,200 1,149 1,025
rhodium $/oz 16,291 14,311 13,319 20,500 20,000 20,125 15,495 20,125 16,250 15,000 5,000 4,818 4,300

iron ore, spot fines $/tonne, cfr China 138 104 99 100 85 160 121 86 89 85 71 65 58
iron ore, spot lump $/tonne, cfr China 155 110 109 120 102 183 134 104 107 102 86 76 69.6
hard coking coal US$/tonne, fob Aust. 452 251 279 290 285 225 367 281 249 228 208 195 170
LV-PCI US$/tonne, fob Aust. 422 244 272 270 260 163 332 241 171 153 139 131 114
semi-soft coking coal US$/tonne, fob Aust. 365 199 233 225 220 155 287 202 166 146 132 124 105
manganese ore $/mtu, cif China 7.59 5.76 4.75 4.60 4.50 5.21 6.06 4.53 4.40 4.30 4.20 4.20 3.70
steel (avg HRC) $/tonne 1,099 753 650 625 608 1,169 893 606 575 550 500 452 379
steel scrap (avg #1HMS) $/tonne 495 380 367 344 334 463 445 332 312 293 259 226 188

thermal coal 6300 US$/tonne, fob Aust. 291 367 380 290 200 98 304 211 163 143 128 118 99
thermal coal 5500 US$/tonne, fob Aust. 199 195 145 214 148 85 179 156 120 105 94 87 75
uranium US$/lb spot 50 49 52 55 58 35 50 57 56 53 51 49 41

Brent crude US$/bbl 104 92 86 84 82 69 94 81 74 75 79 84 75

WTI crude US$/bbl 109 92 83 79 77 68 95 76 69 70 74 78 69
natural gas - US US$/MMBtu 7.47 7.96 5.54 5.83 5.65 3.83 6.40 5.60 5.20 4.92 4.56 4.21 3.53

Source: Liberum; Commodity priceDECK – Policy fade, 6-Dec-22, 2022$ real, active from 2028

19

Disclaimer
This communication has been issued in the UK by
Liberum Capital Limited (“LCL”) which is authorised
and regulated by the Financial Conduct Authority
("FCA") and is a member of The London Stock
Exchange PLC. The registered address of Liberum
Capital Limited is Ropemaker Place, 25 Ropemaker
Street, London EC2Y 9LY. Telephone: 020 3100
2000.
This communication has been prepared by its
author(s) as non-impartial research in relation to
Company (the "Company"), as such that it is
inappropriate to characterise it as independent
investment research, as it has not been prepared in
accordance with UK legal requirements designed to
promote the independence of investment research.
Therefore, even if it contains a research
recommendation, it should be treated as a marketing
communication. However, Liberum is required by the
FCA to have policies in place to identify and manage
the conflicts of interest which may arise in its
production, which include preventing dealing ahead.
Information regarding our policies is available,
www.liberum.com. In addition, a list of items which
could create a conflict of interest and other material
interests in relation to research material is set out on
LCL’s website. For detailed disclosures, please refer
to www.liberum.com/legal
The individuals who prepared this communication
may be involved in providing other financial services
to the company or companies referenced herein or to
other companies who might be said to be
competitors of the company or companies referenced
herein. As a result, both LCL and the individual
employees who prepared this communication may
have responsibilities that conflict with the interests of
the persons who receive this communication and
information may be known to LCL or persons
connected with it which is not reflected in this
communication.
LCL may provide or may have provided corporate
services to the issuers of securities mentioned in this
communication and recipients of this document
should not therefore rely on this communication as
being an impartial document. Accordingly,
information may be known to LCL or persons
connected with it which is not reflected in this
material.
LCL has put in place procedures, systems and
controls to identify and prevent (where this is
possible) conflicts of interest and also has a conflicts
management policy relating to its research and
marketing communication activities, which is
available on its website, www.liberum.com. In
addition, a list of items which could create a conflict
of interest and other material interests in relation to
research material is set out on LCL’s website (see
“Disclosures” below).
This communication is provided for information
purposes only and should not be regarded as an offer
or solicitation to buy or sell any security or other
financial instrument. This communication has no
regard for the specific investment objectives, financial
situation and needs of any specific person or entity.
LCL and/or its officers, directors and employees may
have or take positions in securities of companies
mentioned in this communication (or in any related
investment) and may from time to time dispose of any
such positions and may also provide corporate
finance or underwriting services for or relating to
those companies, for which it is remunerated. LCL
analysts, including the author of this communication,
receive compensation based on a number of factors
including the quality of research, client feedback, firm
profitability and normal competitive factors. This
communication is based on materials and sources
that are believed to be reliable; however, they are not
independently verified and are not guaranteed as
being accurate. All expressions of opinions,
projections, forecasts and estimates constitute a
judgment and are those of the author and the
research department of LCL only, and should not be
relied upon and are subject to change without notice.
The content of this communication may have been
disclosed to the company referenced herein prior to
dissemination in order to verify factual accuracy,
however the company takes no responsibility for the
20
Commodity snapSHOT
06 March 2023
accuracy or otherwise of any opinion, projection,
forecast or estimate contained within this
communication. While LCL endeavours to update its
research communications from time to time it is
under no obligation to do so. No representation or
warranty either expressed or implied, is made nor
responsibility of any kind is accepted by LCL, its
officers or employees either as to the accuracy or
completeness of any information stated in this
document. LCL shall not be liable for any direct or
indirect damages, including lost profits, arising in any
way from use of all or any of the information
contained in this communication.
LCL may have issued other communications that are
inconsistent with and reach different conclusions
from, the information contained in this
communication. Those communications reflect the
different assumptions, views and analytical methods
of the individuals that prepared them.
This communication is not guaranteed to be a
complete statement or summary of any securities,
markets, reports or developments referred to therein.
No representation or warranty either expressed or
implied, is made nor responsibility of any kind is
accepted by LCL, its directors, officers, employees or
agents either as to the accuracy or completeness of
any information contained in this communication nor
should it be relied on as such.
This communication is provided with the
understanding that LCL is not acting in a fiduciary
capacity and it is not a personal recommendation to
you.
The investments discussed in this communication
may not be eligible for sale in some states or
countries and may not be suitable for all investors.
Investors should make their own investment
decisions based upon their own financial objectives
and financial resources and, if in any doubt, should
seek advice from an investment advisor.
Past performance is not necessarily a guide to future
performance. The stated price of any securities
mentioned herein will generally be as at the end of
the business day immediately prior to the publication
date on this communication unless otherwise stated
and is not a representative that any transaction can
be effected at this price.
This communication is confidential and may not be
re-distributed, retransmitted or disclosed, in whole or
in part, or in any manner, without the express written
consent of LCL.
For more information on models, please contact the
Analyst.
In the United Kingdom
This communication is for the use of (a) Professional
Clients and Eligible Counterparties (such terms as
defined by the rules of the FCA) of LCL and (b) other
persons who are not clients of LCL who have
expressed interest in receiving it and who are
Qualified Investors (as defined below) and either
investment professionals (persons having
professional experience in matters relating to
investments, as defined in Article 19(5) or Article
49(2)(a) to (d) (high net worth companies,
unincorporated associations etc) of the Financial
Services and Markets Act 2000 (Financial
Promotions) Order 2005 (as amended) or any other
persons to whom this communication for the
purposes of section 21 of the Financial Services and
Markets Act 2000 can otherwise lawfully be
communicated).
For the purpose of clarity, this communication is not
intended for and should not be relied upon by Retail
Clients (as defined by the rules of the Financial
Conduct Authority).
The content includes data provided by FTSE
International Limited (“FTSE”) © FTSE 2013. “FTSE®”
is a trade mark of the London Stock Exchange Group
companies and is used by FTSE under licence. All
rights in the FTSE indices and / or FTSE ratings vest
in FTSE and / or its licensors. Neither FTSE nor its
licensors accept any liability for any errors or
omissions in the FTSE indices and / or FTSE ratings
or underlying data. No further distribution of FTSE
data is permitted without FTSE’s express written
consent.
EU Third-Party Disclaimer
If this communication is distributed in the European
Union (“EU”) by Raymond James & Associates, Inc.
(“RJA”), an entity registered with the United States
Securities and Exchange Commission as a
broker/dealer and a member of the Financial Industry
Regulatory Authority, or its independent contractors
or such independent contractor’s tied agents
(collectively, the “independent contractors”) or by
LCL to clients of RJA’s independent contractors, then
this communication is independent third-party
research prepared for and distributed in the relevant
EU countries at the determination of RJA and/or the
independent contractors and pursuant to an
arrangement between RJA, Liberum Capital Inc. and
LCL. Neither RJA, nor its independent contractors,
nor any of their affiliates has or had any involvement
in the production, content, or timing of this
communication and neither Liberum Capital Inc. nor
LCL are affiliates of RJA or its independent
contractors.
This communication is distributed solely to persons
who are Qualified Investors within the meaning of
Article 2(e) of EU Regulation 2017/1129 (as amended
or superseded), and this communication is only for
such Qualified Investors whose ordinary business
activities involve investing in equities, bonds, and
associated securities and/or derivative securities and
who have professional experience reviewing and
engaging in such investments. This communication is
therefore not intended to be distributed or passed on,
directly or indirectly, to any other class of persons,
and is not intended for private individuals or those
who would not be classified as “Qualified Investors.”
The delivery of this communication is not a
recommendation to effect any transactions in the
securities discussed herein, nor an endorsement of
any opinion expressed herein. If you are receiving this
communication in one of the relevant EU countries
from RJA or its independent contractors, or LCL, as a
consequence of being a client of RJA’s independent
contractors, RJA accepts responsibility for the
distribution of the communication. Any Qualified
Investor who receives this communication from RJA,
its independent contractors or directly from LCL as a
consequence of being a client of RJA’s independent
contractors, is receiving such communication solely
as a result of its relationship with RJA or its
independent contractor, as applicable, and such
recipient shall not be considered as having a
relationship with Liberum Capital Inc. or LCL. For
additional disclosures about RJA, including those
related to material conflicts of interest, please visit:
https://www.raymondjames.com/-
/media/rj/dotcom/files/legal-disclosures/Liberum-
disclosures.pdf. For further information regarding the
above or related to the above-mentioned securities,
please contact RJA’s independent contractors.
For US Investors
This document is a marketing communication and
has been prepared and distributed by LCL. Liberum
Capital Inc. is a U.S. registered broker-dealer and an
affiliate of LCL. This document is distributed solely to
persons who qualify as “Major U.S. Institutional
Investors” or “U.S. Institutional Investors” as defined
in Rule 15a-6 under the Securities and Exchange Act
of 1934. This communication is only for those Major
U.S. Institutional Investors and U.S. Institutional
Investors whose ordinary business activities involve
investing in shares, bonds, and associated securities
and/or derivative securities and who have
professional experience in such investments. Any
person who is not a U.S. Institutional Investor or
Major Institutional Investor must not rely on this
communication. The delivery of this research
communication to any person in the United States of
America is not a recommendation to affect any
transactions in the securities discussed herein, nor an
endorsement of any opinion expressed herein.
Liberum Capital Inc, is a FINRA/SIPC member and
takes responsibility for the content of this
communication. Any U.S. recipient of this
communication that is not a registered broker-dealer
or a bank acting in a broker or dealer capacity and
that wishes further information regarding the
securities or to place an order in any of the above-
mentioned securities please contact a registered
representative of Liberum Capital Inc.
Analyst Certification: The analyst(s) who prepared this
communication hereby certifies that all of the views
expressed in this communication accurately reflect
his / her personal views about the subject securities