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Tesla interest boosts lithium stocks

electric car charging battery

The S&P/ASX 200 closed up 7 points on Monday afternoon, having been up 0.6% at one point early in the day, with the Australian dollar weakening to sit around US74.34c. Other markets across Asia were trading in the red with US futures falling.

Lithium explorer Lake Resources gained 10.2% after announcing an offtake agreement with Ford. Lithium brine miner Allkem added 2%. Pilbara Minerals is up 1.3%. Core Lithium is up almost 4%. Core in March signed a binding agreement with electric vehicle giant Tesla to supply up to 110,000 tonnes of spodumene concentrate to Tesla from the Finniss Lithium Project near Darwin over a four-year period.

Elon Musk tweeted at the weekend that Tesla may get into the lithium mining and refining business directly and at scale because the cost of the metal, a key component in manufacturing batteries, is so high.

“Price of lithium has gone to insane levels,” Musk tweeted.

Twitter CEO Parag Agrawal announced that Musk remains the largest shareholder of Twitter, and the company will remain open to his input, but tweeted that "Elon has decided not to join our board."

Independence Group lifted its takeover bid for gold and nickel miner Western Areas by 15.2% from $3.36 cash per share to $3.87 cash per share. The Western Areas board has recommended shareholders accept the improved bid.

Inflation

China’s producer inflation for March was higher than expected. The producer price index surged 8.3% as compared with a year ago, official data showed Monday, above expectations for a 7.9% increase in a Reuters poll.

Chinese consumer inflation also rose more than expected in March, with the consumer price index climbing 1.5% year-on-year. That was above expectations in a Reuters poll for a 1.2% increase.

A new report from the Economic Intelligence Unit notes food prices are particularly sensitive to the Russia-Ukraine war as both countries are significant commodity producers. Some Asian countries rely on commodities such as fertilizer from Russia, and a global shortage is already driving up prices of agriculture and grains, according to the research firm.

Given the region’s relatively high levels of dependence on energy and agricultural commodity imports – even if countries don’t source directly from Russia or Ukraine, the spike in prices will be concerning, warned the EIU.

World food prices hit an all-time high in March following Russia’s invasion of agricultural powerhouse Ukraine, a UN agency said on Friday.

World food commodity prices made a significant leap in March to reach their highest levels ever, as war in the Black Sea region spread shocks through markets for staple grains and vegetable oils,” the Food and Agriculture Organization said in a statement.

The disruption in export flows from the war and international sanctions against Russia has spurred fears of a global hunger crisis, especially across the Middle East and Africa, where the knock-on effects are already playing out.

Russia and Ukraine account for a huge share of the globe’s exports in several major commodities, including wheat, vegetable oil and corn.

Ukrainian ports have been blocked by a Russian blockade and there is concern about this year’s harvest as the war rages on during the spring sowing season.

Bitcoin steady US$42,168

Gold steady US$1941.67 an ounce

Brent slightly lower US$102.57 a barrel

WTI slightly lower US$96.66 a barrel

READ MORE: APAC week ahead; UK/EU week ahead


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