• Miners defy commodity movements and bad news to power through Tuesday morning
  • Materials sector up over 0.8%
  • Nickel surplus looming

One of the big stock news stories in America was a 6.1% flop for Tesla, which gave up some of its outsized June gains on the back of a negative Goldman Sachs note.

Flagging a lack of value in the share price after a near 40% run over the past 30 days and lower prices for new electric vehicles, you would think a bit of hardship at one of the lithium world’s largest customers could have a chilling effect on local diggers.

Not so. The Materials sector is up a promising 0.81% this morning, and lithium players are joining up with iron ore and coal names to provide a satisfying morning for ASX large cap resources investors.

That came despite some weak consumer spending numbers in China, likely in anticipation of stronger economic stimulus as the country aims to hit a GDP growth rate of 5% this year.

Lithium prices were stagnant overnight but remain at high levels, with lithium hydroxide and carbonate chemicals both fetching well over US$40,000/t in north Asia according to Fastmarkets.

Iron ore swaps fell 0.2% to US$109/t yesterday but were back in recovery mode today, with Singapore 62% Fe futures up 1.46% to US$110.65/t.

 

Who were the leaders?

Local lithium players were the big front runners for the market this morning.

Mineral Resources (ASX:MIN) was up 2.68% with Liontown (ASX:LTR) (+2.44%), Allkem (ASX:AKE) (+2.04%) and Pilbara Minerals (ASX:PLS) (+1.76%) and Core Lithium (ASX:CXO) (+2.99%) also up and about.

Iron ore miners were in fine form, with FMG (ASX:FMG) (+2.34%), Rio Tinto (ASX:RIO) (+1.6%) and Champion Iron (ASX:CIA) (+2.5%) all catching a bid.

Coal and gold miners were steady as well, with Whitehaven (ASX:WHC) rising more than 2.7% on higher energy prices.

European gas prices ran higher in the wake of the Wagner Group insurrection in Russia.

Not as exciting is nickel, which is down around a third this year, though still at strong levels in excess of US$20,000/t.

The battery metal has seen weak demand in China and a massive lift in Indonesian supply threaten a significant surplus this year, ANZ’s Jack Chambers said in a note.

“China’s consumer driven recovery is also showing signs of losing momentum,” he said.

“Domestic travel spending during the recent Dragon Boat Festival holiday was lower than pre-pandemic levels.

“Home sales figures are below the level in previous years as well. This has weighed on nickel prices and was compounded by surging supply.

“Indonesian output has grown by almost 50% so far this year, and further expansions are set to push the market into a sizeable surplus.”

 

Ground Breakers share prices today: