Rising tide lifts resources

WITH news that the unemployment rate actually went down in April, along with overseas stocks rallying, the Australian dollar lifting and metals prices looking strong, it was a good day for Australian miners.

Kate Haycock

On the Australian dollar, which lifted to just over US75c, its strongest level since early October last year, the rise is of course actually not such a great thing for miners.

Look at the copper price – yesterday it was $US4529 per tonne, while today it was 4.7% higher at $US4743/t.

But if you look at that price in Aussie dollars, the picture is less rosy. Today, a tonne of copper is worth around $A6300 – last week, that same tonne was worth $US4183 and $A5919 – that’s a rise of 13.4% in the USD price, but only 9.5% in Aussie dollars.

Of course, metals contracts work more on averages than the daily spot price fluctuations, but the overall trend, if it continues, will ease some of the small cushioning effect for Australian miners from the weaker dollar.

Back to base metals – copper wasn’t the only metal to perform strongly, with nickel up almost 6% to $US12,632/t, while tin and zinc both increased 6.7% and 4.6% respectively.

Nevertheless, the stronger dollar might suggest there is some faith in Australia’s economy as well as its mining sector.

Also helping bolster the overall markets was the unemployment rate, which bucked everyone’s expectations by actually falling from 5.7% to 5.3% seasonally adjusted.

While only time will tell if it is a long-running trend or just a blip, the Australian Bureau of Statistics figures hint that maybe things aren’t about to go as pear-shaped as some believed.

US markets also strengthened last night which helped bolster the local bourse, with the S&P-ASX 200 up 1.9% to 3938.7 points by the end of trade.

Boats lifted by the rising tide included BHP Billiton and Rio Tinto, with BHP up a healthy 5% or $1.79 to $35.69 and Rio rising almost 3% or $1.93 to $71.04.

Other gainers included coal miner Felix Resources, up 12% or $1.32 to $12.26, while nickel miner Western Areas gained 45c to $5.30 after finalising an offtake deal with BHP.

Another coal miner (with iron hopes), Aquila Resources lifted 44c to $4.73, while Atlas Iron was up 22c or 15.7% to $1.62.

Copper miner Equinox Minerals gained 20c or 7.4% to $2.91, while ambitious nickel play Mirabela Nickel also rose a solid 9% or 21c to $2.51.

Another nickel play to gain was Panoramic Resources, up 9% or 16.5c to $1.96 on an updated resource.

At the more junior end, Bathurst Resources rose 2.5c to 7.5c, but the gain was due to only one trade of 35,000 shares.

Ironclad Mining was up 8.5c to 30c, a 40% increase, with 55,000 shares moving in 12 trades.

The most traded stock was Sundance Resources, up 2.5c or 13c with 77 million shares moving in 1175 trades.

Of course, there were a few strugglers – Liontown Resources dropped 1c to 1.5c, the victim of only four trades, while Pan Palladium dropped 1c to 4c after a sale of one parcel of 19 million shares.

Out of the mid-tiers, Newcrest Mining shed 44c to $30.01, a 1.4% gain, while Extract Mining dropped back 5% or 25c to $4.70, unwinding yesterday’s rise.

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