The market was expecting a quieter day with the US out for the Independence Day holiday, however its other offshore lead, base metal prices on the London Stock Exchange, firmed.
Lead reached new highs – both spot and three-month prices climbed 4.2% to $US2889.50 per tonne and $2887/t respectively – on news smaller lead producers in Asia are being forced to cut back on consumption, a Beijing-based lead trader told Dow Jones Newswires.
“Some of the small producers in Taiwan and some other countries are lowering their production or shutting down their facilities because of the high lead price,” the lead trader said.
Lead specialist Abra Mining has gained almost as much as the spot price of lead, which rose 22.9% in the past month. Abra delivered 25.6% in returns over the same period.
However fellow lead specialist Herald Resources only managed 5.7% over the past month.
Today Abra was subdued despite the new lead record, closing unchanged at 27c while Herald crept up 1c (0.7%) to $1.41.
It was a different story with mining majors BHP and Rio, which led most resource stocks to positive territory as market sentiment lifted on expectations of a good reporting season next month.
“We haven’t had too many profit downgrades which suggests to me that the reporting season is likely to be reasonable,” head of investment markets research at Colonial First State, Hans Kunnen, told Dow Jones.
“That’s what people are looking forward to.”
BHP improved on yesterday’s all-time high of $36.40, touching an intraday high of $37.17 before cooling to $37.10 – a gain of 70c or 1.9% – while Rio closed at a new high of $102.51.
The sentiment surrounding iron ore stocks remains bullish with iron ore plays in both the junior and mid-tier end making notable gains.
The Mid-West region of Western Australia was the place to be for iron ore miners and hopefuls, with Ferrowest – which holds the Yalgoo magnetite project – topping the list for the iron ore sector and adding 6.5c (10.8%) to 66.5c.
Midwest Corp gained 27c (9.2%) to $3.21, Golden West Resources firmed 15c (7.3%) to $2.20 while Gindalbie Metals climbed 6c (5.4%) to $1.18.
Comments from Oxiana’s managing director Owen Hegarty published in today’s Australian Financial Review of synergies in a marriage with Zinifex boosted both stocks to new all-time highs.
Oxiana reached $3.93 before cooling to $3.89 – a gain of 15c or 4% – while Zinifex recorded $20.18 before falling to $20, a climb of 86c or 4.5%.
A spokeswoman from Oxiana told Dow Jones she could not confirm or deny any merger talks however the company continued to assess acquisition opportunities in Australia and Zinifex may be among the potential targets.
"We're looking at things all the time and Zinifex happens to be one of those. We've got a very strong organic growth pipeline, but certainly mergers and acquisitions are part of our strategy as well," she said.
