June was about data centres and Trump

In June, LME prices for key base metals, aluminium and copper, popped a little (but not as much as in May) on optimism of upcoming capex spends on data centres, and Trump’s big and beautiful spending bill.
In Australia, growth in base metal prices decelerated month on month from 3% in May to 2% in June, meaning that prices still grew, but at a slower rate.
Meanwhile, Australian bulk export spot prices declined at a faster rate of 6% in June, marking meaningful price declines in 9 out of the past 12 months.
We’ve been in a cyclical bear market for bulks since January 2024.
Spot uranium, a major data centre energy source, had a party in June, rising by around 10%.
Gold consolidated in a sideways range and silver continued to catch up.
Lithium (measured in CIF hydroxide) was still on the mat, having collapsed by over 82% since its 2023 high, two years ago. Let’s face it, there’s lots of it and substitute battery chemistries are growing.
Last month, the overall commodities price index head and shoulders that I’ve been writing about since mid-last year 👇 continued. The cyclical downward trend is still intact.
M&A for grade, size and diversification still favoured over exploration. No change.

Your Charts 📈

Base Metals 🔗🏮🔌

In April I noted that it was a case of “down from here on in.”

I stood corrected last month with base metal index price growth accelerating in May.

But that’s now slowed from 3% in May to 2% in June, meaning the rate of growth is slowing and likely to get worse next month as a result of tariffs and further out, as the USD resurges.

Bulk minerals 🧱👷‍♀️🌉

SMASHED in March, hit again in April, flat in May and SMASHED again in June, with month-on-month prices falling at a faster pace of 6%.

Demand destruction plus oversupply explains what’s been going on with bulks, but I expect coal prices to strengthen this year and that should add some strength in the next few months.

Note: Dollar weakness (i.e., USD) has not been sufficient to make our commodity exports more attractive to importing nations outside the U.S., and if the dollar strengthens, prices should soften.

Energy minerals (ex-coal and oil) ⚗🧲☢

The July 6, 2023, price high for LME Lithium Hydroxide CIF was US$46,046.

On the last day of June, it had continued its collapse, this time to US$8,250/t more than 82% down from its July 2023 peak.

I expect fossil fuels to start to make a structural comeback given global demand for energy driven by data centre formation and that means we will need every calorific unit available, which I’m sure will be repugnant to die hard green transitioners.

Volatility (still) ahead for industrial metals, no change to thesis

Still more volatility ahead as a result of Trump, tariffs, the Rudd quid pro quo, and China demand exhaustion. No changes there.

You need to recalibrate your investment thesis and corporate development strategy if you’ve built it for yesterday’s macro and geopolitical drivers.

As I also mentioned last month and in the months before, we’re still seeing cyclical dollar weakness, but within a secular or long-term dollar strength thesis.

That also hasn’t changed. Weakness followed by strength is typical.

Cyclical weakness in the dollar should lead to respite outside the U.S., with a gentler dollar creating liquidity in those countries and creating abundance in the force, i.e., the Eurodollar market, and firing up demand for commodities.

But how long that lasts will be a function of Trump policy, how Scott Bessent the U.S. Treasury funds and refinances its US$36 trillion debt stack, and whether sovereigns up their defence to GDP game to 5% and/or pay tariffs.

Summary implications

Data centres require materials, chips and energy to power artificial intelligence, cloud compute, storage, bitcoin mining and other digital knowledge management. Uranium is a no-brainer to power these data factories.

Copper, uranium and high calorific value fossil fuels will remain in demand.

Gold and bitcoin continue to be supported due to increasing deficits and requirements for debt monetisation (by central banks) and defence spending blowing out fiscal budgets being factored in by markets—well before it happens.

Implications for corporate development: if interest rates in Australia do start to come down this year, greenfield developing projects to deliver into the drivers outlined here may start to emerge. However, as a result of the present macro and opaque geopolitics, M&A is probably the cheaper option.

Implications for investment: Uranium looks strong. Copper is consolidating and lots will depend on whether the spending bill is passed in both houses of Congress, but that does not necessarily mean Australian copper is favoured. Copper remains a USD story (despite supply shortfalls) due to “affordability”. Gold and bitcoin are in-demand anti-debasement assets and with the U.S. Federal Reserve signalling rate cuts towards the end of the year, NASDAQ and S&Ps are already pricing in risk-on.

The wild card to all of this? Trump tactics versus reality a few weeks and months after those tactics.

See you in the market.

M

Metals Roundup Jun '25: Base metals pop on data centre spend