Iron ore could be returning to an even keel, somewhat encouraged by China’s stimulus measures, while the Australian Securities Exchange edged down.
ANZ senior commodity analyst Daniel Hynes and commodity strategist Soni Kumari say the market is seeing a pick-up in steel and iron ore demand from non-property sectors.
Asset investment growth increased to 3.3% in September, up from 1.5% in August, which the analysts say is fuelled by faster government bond issuance.
“Rising Chinese steel exports could also provide some support.
“Trump’s recent election victory has renewed concerns of another global trade war. This could see Chinese steel producers trying to ‘front run’ a rise in tariffs by increasing exports over the next few months.
“We think it is reasonable to assume these factors will keep steel output elevated.”
The iron ore price is down 0.58% at US$101.63 ($157,23), according to Trading Economics.
The S&P/ASX200 is lower today (18 November), dropping 27.90 points, or 0.34%, to 8,257.30 points at 10.32am AEDT. The index has lost 0.46% for the last five days, and sits 1.52% below its 52-week high.
Eight of the 11 sectors were in the red. Utilities, materials and energy, however, escaped the downward pull of the broader market in early trade with modest gains.
The miners led the gainers just after the opening bell, with uranium the dominant force. Deep Yellow (ASX:DYL) advanced 8.33% to $1.24, Boss Energy (ASX:BOE) rose 6.47% to $3.05 and Paladin Energy (ASX:PDN) climbing 4.94% to $7.65.
Aluminium heavyweight Alcoa (ASX:AAI) jumped 6.71% to $68.51 and diversified miner South32 (ASX:S32) increased 5.63% to $3.75.
Gold miner Emerald Resources (ASX:EMR) was the exception, starting the session down 2.75% at $3.37.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market.
The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & Stock
