Ground Breakers: Market down with Case of the Ex(-Dividend)
Commodity news was generally positive overnight after China’s steel PMI lifted to 46.1 in August, up more than a third on July but still in contraction.
That sent iron ore prices back to a touch above US$100/t as sentiment improved following some pretty harrowing accounts from major steel producers Angang and Baoshan over the last few days.
Base metals were marginally lower although gold miners are hurting today with precious metals trading down and gold prices tracking to the US$1710/oz level on the expectation of more rate rises to come from the US Fed.
All irrelevant to the market because today the biggest, baddest stock in the ASX 200, BHP (ASX:BHP) went ex-dividend today, trading down more than 6%.
Since its unification earlier this year BHP makes up around 10% of the ASX 200, and even more of the materials index, which was down a harrowing 3.71% this morning.
Energy stocks were also down, with uranium explorers deeply in the red after a few days of strong gains.
If you were seeking a safe haven today it would be coming not in gold, but in coal, with Yancoal (ASX:YAL), Whitehaven (ASX:WHC) and New Hope Corp (ASX:NHC) all in the green, joined by $1.3 billion capped graphite and battery material play Syrah Resources (ASX:SYR).
Tin prices have shifted wildly in 2022, rising to all time highs as shortages bit before coming back as falling Chinese demand and surprise contributions to warehouse stores alleviated supply issues.
At US$23,652/t LME tin is still trading at strong levels, and the primary exposure on the ASX for that thematic is Metals X (ASX:MLX), half-owner of the historic Renison Bell tin mine in Tasmania.
At one point in March LME tin prices were trading at almost US$50,000/t, with some analysts thinking extraordinary tightness in international markets could send prices higher.
The Apple Isle has treated MLX well in FY22, with revenue climbing 144% to $228.9 million, basic profit after tax up 669% to $176.3m and net profit attributable to members up 111% to $183.9m.
Record tin prices have seen MLX build a cash balance of $122 million, with net debt of $3.6 million, though the formerly diversified miner which has sold off or spun out gold, nickel and copper mines in the past five years has held off on paying a dividend.
Australia’s largest primary tin producer, Metals X posted an increased resource of 272,000t of measured and indicated tin metal in July, with a life of mine plan later this year expected to outline a more than 10-year future for the deposit.
It has operated in its current state since 2008, but the area has been mined for the base metal primarily used in electronic solder since the 1890s.