Iron ore stocks seemed to be all the rage as forecasts for the metal’s price maintained its upward trajectory, with contract prices reportedly rising as much as 70%.
“Brokers are looking for anywhere between 30 to 70 percent up on the negotiations for 2008, keeping in mind that, at times, the spot market has been as much as 100 percent up,” an unnamed trader told Dow Jones Newswires.
The trader added that a recent spot iron ore sale by Brazilian mining giant CVRD was at twice the current contract price for the metal. Annual negotiations for the benchmark contract prices for iron are set to get underway next month.
With the hunger for the metal not abating, iron ore stocks seized the opportunity to gain more ground in today’s session, with FerrAus leading iron plays, reaching a new all-time high of $1.35 before cooling to $1.28 – a climb of 19c or 17.4%.
Iron ore miners also made their mark with Territory Resources up 10.5c (9.7%) to $1.19, Murchison Metals climbed 27c (5.4%) to $5.24 and its takeover target Midwest firmed 24c (5%) to $5.08.
Meanwhile comments from BHP chief executive Marius Kloppers at the UBS investment forum in Melbourne helped fuel the iron ore sector’s outlook and interest in the company, which closed at its new all-time high of $47.70.
Kloppers told delegates that strong demand for the commodities BHP produces would prevent its margins from being squeezed by increasing costs, the newswire reported.
“It is difficult for me to see, in this current environment, in the short run, a series of events that would give me serious pause and make me worry about margin compression,” Kloppers said.
“The iron ore market is as tight as I have ever seen it; the coking coal market is tighter than I have ever seen it; the manganese market is tighter than I have ever seen it.”
While Kloppers painted a rosy picture of the outlook for manganese, the takeover stoush for manganese miner Consolidated Minerals took another turn, with Ukrainian investment group, Palmary Enterprises, scoring the latest hit.
The Takeovers Panel has ordered Pallinghurst Resources to extend the deadline of its offer by over a week to November 2.
The panel said it has decided to start proceedings in relation to both matters raised by Palmary, which is seeking a declaration of unacceptable circumstances over Pallinghurst’s attempt to change its final statement, in relation to its offer price on Friday, which the former claims breaches the Australian Securities and Investments Commission’s truth in takeovers policy.
The latest in the takeover battle did nothing to ruffle ConsMin’s share price, which closed unchanged at $5.
Pan Australian Resources had a great day on the bourse on no news, climbing over 17% to an intraday high of $1.06 before cooling to $1 – a climb of 9.5c or 10.5% – and heavy trading of over 23 million shares, compared to an average 5 million.
The move may spark the Australian Securities Exchange to issue a speeding ticket to the Laos gold miner which has lately seen a heavy volume of shares traded despite the company’s last announcement being made last month.
Another notable climber in today’s session was Bougainville Copper, which closed at a 12-month high of $1.15, still feeding from the release of its September quarterly yesterday.
However the day’s highest mover – by a long shot – went to debutant Global Iron, which closed at a 250% premium to its 20c issue price.
The Cape Lambert Iron Ore spin-off reached a high of 75c before closing at 70c.
