The local bourse dipped in early trade before an afternoon return to positive territory. The S&P-ASX 200 index hit an intraday low of 4725.8 points this morning before climbing to close at 4750.3 points, up 0.3%.
The mood was downbeat on Wall Street where the Federal Reserve’s Beige Book reported only a “modest” economic recovery this year with a slight improvement in consumer spending offset by the impact of severe snowstorms in the US.
The Dow Jones Industrial Average closed 0.09% lower at 10,396.76 points, while the NASDAQ composite dipped a fraction of a per cent to 2280.68 points.
Closer to home and the mining heavyweights added to yesterday’s gains with BHP Billiton closing A61c higher at $42.28, while Rio Tinto gained 53c to $74.40.
Meanwhile, steel mills in China are looking to accept a 50% hike in benchmark iron ore prices, Chinese media has reported.
According to a report on AAP, a source told China Daily the steel mills might have no choice but to accept a 50% jump in current benchmark prices.
"If other Asian steel mills accept the new ore prices, then Chinese steel mills will have no other choice but to accept the same as stopping production is not in the best interests of the industry," the source said.
BHP, Rio and Vale are in talks with Chinese steel mills to lock in a benchmark price for 2010-11.
BHP chief executive Marius Kloppers recently talked up a sharp rise in benchmark iron ore prices on the back of an increase in Chinese demand.
"For iron ore, coking coal, the prices that we get today were settled at the depth of the economic crisis so I think there's probably a good chance that they will go up from where they are today," Kloppers said at the time.
Commodities had another positive session on the London Metal Exchange with nickel for three-month delivery adding 2.7% to $US22,845 per tonne while zinc gained 2.9% to $2320/t and copper added 1.2% to $7680/t.
Analysts said last night’s rally in nickel was based on stock falls, which indicated an increase in stainless steel demand.
In today’s trade, nickel was down $290 to $22,555/t.
In the meantime, Standard Chartered commodity strategist David Barclay told Dow Jones Newswires that gold looked well supported with sovereign risk issues still in the news, though the euro-US dollar relationship could be a key factor going forward.
He said the key resistance for gold was $1150 an ounce. The precious metal was trading at $1136/oz, down 0.3%, at 4.12pm AEDT today.
Newcrest Mining closed at $A33.50, up 55c and Lihir Gold gained 3c to $2.94, while Resolute Mining jumped 6.5c to $1.02.
In other news, Aquila Resources has launched legal proceedings seeking damages from Vale over a default on the pair's $1 billion Eagle Downs coking coal joint venture.
Aquila closed the day 12c lower at $10.22.
One of the biggest movers by percentage on the Final Call watchlist was Midas Resources, which gained 2.7c, or 55%, to 7.6c after yesterday announcing it had expanded its Pilbara holdings on being granted a further iron ore tenement in the Yandicoogina area.
The most traded stock on the watchlist today was Focus Minerals with more than 92.4 million shares changing hands by the final bell.
