A miserable day yesterday for most commodity stocks, despite the rise in the wider market.
That overall strength yesterday when the ASX 200 rose 0.8%, or 45 points. After a 1% plus drop on Wall Street overnight, our market will start in the red to the tune of 17 points or so.
Another weak report on spot iron ore prices won’t help after Monday night’s big fall.
The spot price fell 0.8% to $US62.80 overnight Tuesday. The price is now at its lowest since mid 2009 and has now lost 12% so far in 2015.
The big fall Monday night of more than 4%, to $US63.30, sent tremors through the local iron ore sector yesterday with Fortescue and Arrium in the spotlight.
This latest fall will add to those pressures.
Arrium, which last week write off $1.3 billion and announced nearly 600 job losses at one of its two South Australian iron ore mines, saw its shares fall 9.7% to 18.5.
But small gas hopeful, LNG saw its shares jump more than 16% to $3.05 for no apparent reason at all other than it announced it had a cash balance of more than $53 million at the end of December, so the company gets to live on for another quarter or two.
Lynas, the rare earths company and like LNG, a very volatile stock (and beloved of day traders), saw its shares slump more than 19% to 5 cents.
The country’s number 3 iron ore producer Fortescue Metals Group, saw its shares close down 2.3% at $2.08.
Fortescue is due to update the market tomorrow with its 4th quarter and interim production and sales data, as well as figures on its operating costs.
Smaller iron ore producer, Mount Gibson, went against the weaker trend, rising more than 9% (only 2 cents, admittedly) to 23 cents. BC iron shares lost 5.5%, in keeping with the weaker trend among iron ore companies.
Smaller losses were seen in the shares of BHP Billiton shares, down 1.5% to $28.95, and Rio Tinto shares down only 0.1% to end at $56.80.
In the US on Monday night, US based iron ore producer (the US, Australia and Canada, where it is exiting) Cliffs Natural resources revealed it had abandoned its 15 cents a share quarterly dividend to save cash, and paid down debt by $US400 million as it continues to hunker down to ride out the sell off in the market.
Cliffs is due to reveal its quarterly results next Monday night in the US and may detail the future direction for its WA mining assets.
Dropping the dividend will give the Cleveland-based company around $US92 million a year of extra free cash to pay down debt, it said.
Gold stocks were generally weaker. Newcrest, which produces its December quarter production data later this week, saw its shares lose 1.7% to $13.56 as gold prices fell in overnight and Asian trading yesterday.
Northern Star, another gold miner, saw its shares down 7.8% at $1.935.
Among the oils, Woodside shares fell 0.4% to $34.25, but Santos shares were shed 3% to end weaker on $7.56.
Commonwealth Bank shares jumped 1.6% to reach a new all-time high of $87.63.
National Australia Bank was up 1.1% to $35.15, while Westpac shares were up 0.7% to $34.56, and the ANZ rose 1.15% to $32.57.
Telstra was another star, its shares up another 1.6%, to a new 14-year high of $6.44 taking its net dividend yield down to just 4.6%.
