ASX Small Cap Lunch Wrap: Who’s working on a major blockage today?

Could we be about to see a repeat of 2020’s great toilet paper shortage, when at the height of the COVID-19 pandemic supermarket shelves were stripped bare of the essential hygiene product?

Some experts think so.

Fragile global supply chains weakened by the COVID pandemic and a lack of shipping containers to transport loo roll around the globe are leaving retailers caught short.

Add to this the growing backlog in shipping movements caused by a massive container ship wedged in the Suez Canal and toilet paper sellers have a big problem on their hands.

“With supply chains already under pressure, a large container ship has now literally blocked one of the world’s major trade routes,” ING economist Joanna Konings told the Daily Mail.

Wood chip firm Suzano’s boss Walter Schalka told Bloomberg a lack of available container ships had triggered delays in shipments from its terminals in South America.

The Brazilian company relies on shipping to deliver its wood pulp to toilet paper manufacturers around the world, but it is finding it difficult to gain space on booked-out ships.

Scandinavian toiler paper producers like Metsa Fibre in Finland and Sodra Cell International in Sweden stated they are awaiting delivery of delayed wood pulp.

Tug boats and dredgers have been scrambled to the Suez Canal to free the wedged container ship, Ever Given, after it became stuck in the important waterway for trade this week.

“As the Suez Canal Authority works to free the canal, traffic is building up, and missing inputs will disrupt supply chains,” said Konings.

To markets:

At lunchtime in Sydney, the ASX All Ordinaries index had risen 0.45 per cent in early trade to 7,053 points.

US stock indexes finished overnight trading mostly rangebound. The NASDAQ put on 0.1 per cent to 12,978, while the blue chip Dow Jones index climbed 0.6 per cent to 32,619.

The S&P 500 was 0.5 per cent higher at 3,910 at Thursday’s market close.

“US stocks rose in a late-day rally on Thursday, as investors bought stocks likely to do well in the recovery and picked up beaten-down Apple and Tesla shares in anticipation that the US economy grows at its fastest pace in decades this year,” said stockbroker Argonaut in a note.

The price of gold in US dollars was hovering around $US1,728 per ounce ($2,274/ounce), Friday.

Ten-year bond rates were generally steady with the US yield trading at 1.63 per cent and Australia’s was at 1.66 per cent, both lower than a week ago.

WINNERS

Here are the best performing ASX small cap stocks at 12pm Friday March 26:

Swipe or scroll to reveal the full table. Click headings to sort.

Stocks highlighted in yellow made market moving announcements

Alerts services company Aeeris (ASX:AER) made large gains in Friday trading without issuing any market update although it may have seen a large uptake in its services in this week’s NSW floods.

The company’s Early Warning Network monitors severe weather and natural hazard events across Australia and alerts its customers to any impending threat to their business or property.

Aeeris sources data for its EWN from regional fire agencies and the Australian Bureau of Meteorology among others.

Aeeris declared a 288 per cent increase in post-tax profit to $348,450 in the year ended December 2020, compared to a loss of $184,460 in the 2019 calendar year.

Pet services business Mad Paws (ASX:MPA) debuted on the ASX Friday through an oversubscribed $12m IPO and saw its share price rocket in morning trading.

Shares in Mad Paws surged past their IPO price of 20 cents per share and an initial market value of $43m, and early investors include Airtasker founder and chief executive Tim Fung.

The Sydney-based former start-up provides pet sitting services to Australian pet owners and some were invited to participate in the company’s IPO including 400 who subscribed for a total of $1m worth of Mad Paws shares.

Another strong gainer Friday is WA gold explorer Lefroy Exploration (ASX:LEX) which announced assay results for recent drilling at its Burns prospect within its Lefroy gold project.

Its maiden drilling program for 22 holes at the prospect located 50km south east of Kalgoorlie intersected gold and copper, including a spectacular hit of 60m at 5.22 grams per tonne gold and 0.38 per cent copper from 112m.

LOSERS

Here are the worst performing ASX small cap stocks at 12pm Friday March 26:

Swipe or scroll to reveal the full table. Click headings to sort.

Stocks highlighted in yellow made market moving announcements

Canadian coking coal exploration company Atrum Coal (ASX:ATU) fell heavily in Friday trade after it highlighted dramatic changes to the Alberta provincial government’s coal policy.

Atrum Coal said it has paused a pre-feasibility study for its Elan project and halted all site activities as the government of Alberta has reinstated its 1976 Coal Development Policy.

In addition to this, Alberta’s minister of energy has issued a directive to Alberta’s energy regulator stating that no mountaintop removal will be permitted for mining, and all restrictions under the 1976 coal policy will apply, including all restrictions on surface mining in category two lands.

Atrum Coal’s Elan hard coking coal project is located on what has been designated as category two lands under the reinstated Coal Development Policy.

In another blow, the energy minister for Alberta has stipulated in his directive to the energy regulator that all future coal exploration approvals on category two lands will be prohibited pending consultation on a new coal policy.

The Alberta government’s decision could boost the prospects of Australian hard coking coal producers who have contended with prolonged import restrictions at Chinese ports.