First Read: Daily Commodities Note "U.S. Interest Rates Unchanged" Shaw

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First Read: Daily Commodities Note "U.S. Interest Rates Unchanged" Shaw

s. Re-allocation of power in Morowali to support aluminium

smelter? Media reports suggested that Tsingshan lowered nickel pig iron output in

Morowali to conserve energy for upcoming aluminium smelter. Our live port data

suggests the same, with NPI and nickel matte exports from Morowali down to zero in

May and in the first two weeks of June. We estimate that the reduction in Morowali NPI

production may free up ~1GW of power capacity, which may support ~650-700ktpa of

aluminium smelter capacity (Figure 5). This aligns with Xinfa‘s Taijing project, a 600ktpa

aluminium smelter in Morowali which started in 2Q26 and is expected to fully ramp up

by end of 2026E, though we have yet to record outgoing aluminium shipments from the

project at the time of writing. Link to note. Source: UBS.

Mining Strategy: Postcards from USA & Canada. Macro: Looking past ME

demand risks to AI trade & structural deficits. The ‘debasement/hard asset’ trade

resulted in a synchronised upcycle in 1Q26 led by copper/gold; investor interest remains

high, but focus has changed. Commodity/mining investors (& broader market?) are

largely looking through near-term downside risks to economic growth/demand due to

‘higher for longer’ energy prices and the impact on rates, and instead focusing on

secular growth drivers (supported by AI optimism) with sentiment towards copper/

aluminium generally positive. Views in coal are mixed (thermal supportive vs met

sceptical). Sentiment for iron ore remains bearish/indifferent but after holding up better

than expected for years, investors need to see lower prices to believe them. The shift in

sentiment towards gold has been most pronounced and the biggest surprise. Since the