The downturn in lithium and nickel prices that led to no shortage of shock news for the ASX materials sector in early 2024 is still very much the quo.
Woodside (ASX:WDS) says it sees domestic WA gas demand falling 10% in its forward projections due to nickel project shutdowns; IGO (ASX:IGO) closed down a mine, Core Lithium (ASX:CXO) got hit with more bad news this week and BHP (ASX:BHP) continues to move ahead with a freshly trimmed workforce.
At least Australia’s biggest miner, and its most valuable stock, is recovering from its recent earnings-report-led correction – even as iron ore prices flounder in the surf.
However, March has seen some updates in the land of speculative metals trading that carries our proud nation forward worth briefly touching on.
Excluding iron ore, some of Australia’s biggest export prizes are having a somewhat more tolerable March.
Take a look at monthly (MoM) gains for the following metals.
All information is accurate as displayed on TradingEconomics at 3pm AEDT on Thursday:
- Lithium is up +15.38% MoM
- Copper is up +7.51% MoM
- Gold is up +8.38% MoM
- Silver is up +9.19% MoM
- Nickel is up +12.65% MoM
- Palladium is up +10.89% MoM
- Zinc is up +11.63% MoM
- Lead is up +6.50% MoM
- Coal is up +9.48% MoM
So what’s going on?
Copper is the most addition to the March-rally list, with a supply shock in China – smelters are set to curb production – sending the electrification metal sharply upward overnight.
Nickel prices are also up on a supply-side story. Indonesia has done something similar and rolled back smelter output.
Lithium prices are up as traders bet that the oversupply has gotten as bad as it possibly can, helped by some bullish trading notes from investment bankers saying the same thing.
Gold is up for a litany of reasons – geopolitics, general sentiment (or, if you prefer, contagion bullishness stemming from the S&P 500) – and if you listen to Bank of America strategists, the USA’s rapidly rising government debt near USD$34T is making people nervous.
So there’s some points to go home and talk about if you live with someone in mining.
But it’s not all rosy.
Iron ore continues to flounder, and uranium prices have also been knocked off their pedestal above US$100/lb.
Check this out:
- Uranium is down -13.35% MoM
- Iron Ore is down -16.02% MoM
- Neodymium is down -12.38% MoM
- Magnesium is down -11.88% MoM
Tanking Neodymium (Nd) prices might give Canberra food for thought after it gave nearly a billion dollars to Arafura Rare Earths (ASX:ARU) on Thursday.
The best known REE has fallen continuously through 2024 since mid-February and, looking at the year-on-year (YoY) read, it’s lost an eye-catching -43.99%.
Iron Ore prices sinking perhaps poses the biggest economic risk to Australia – something treasurer Jim Chalmers told the country on Thursday morning.
It continues to sink as a weak China failed to convince the world it’s doing OK at its annual government-policy-setting ‘Two Sessions’ extravaganza last week. Maybe they shouldn’t have cancelled the press conference that usually follows.
Uranium is down because of bets that speculative bulls overdid it, especially now that Canada’s Cameco is to offset global loss previously priced in by production issues hitting Russian-backed Kazakh giant Kazatomprom.
Oh, and by the way. If you’ve noticed local Aussie servo prices going up, well. The price of Brent Crude is nearly back to US$85/bbl.