First Read: Daily Commodities Note "US and Iran step up hostilities" Shaw

Research evidence excerpt

First Read: Daily Commodities Note "US and Iran step up hostilities" Shaw

Lithium - Previewing the JQ results: We expect June quarter results to highlight a

meaningful step-up in free cash flow as stronger realised lithium prices drive robust

margins. With lithium prices recovering sharply since mid-CY25, producers have moved

quickly to revisit and accelerate growth initiatives, although we believe the market is

underestimating the capital required to deliver the next expansion phase. We await

further information on IGO’s optimised Greenbushes LOM plan, LTR’s 4Mtpa update in

the SepQ, followed by PLS’s P2000 FS update, PMET's updated CV5 CV13 studies later

in 1H27. We recently also initiated on Elevra Lithium, which pre-released strong JunQ

production recently laid out its 3-stage expansion plan. Concerns build around rising

battery inventories, weak China NEV sales, an accelerating / uncertain supply response,

though we continue to believe the market fundamentals remain strong and remain

overweight lithium. We outline our June quarter expectations below. Link to note.

Source: UBS.

Copper - Data center download: AI is the dominant investment theme in the broader

market with Data Centres and associated power generation/ infrastructure the key AI

exposure/growth segment within industrials/materials. DCs are power intensive and

therefore copper intensive, so copper finds itself in the 'AI basket'; but how important

are DCs for the copper market? In our view, DCs are unlikely to drive a 'transformational'

step change in copper demand (vs 50yr demand CAGR ~2.5%); but they are one of a

number of secular growth drivers (EVs, renewables, grids defence) underpinning robust

medium-term demand. Within these high-value applications, copper represents a small