The Materials sector – comprising mostly large and mid-cap miners – edged lower today but preserves a healthy +6% gain over the past month.

The iron ore miners fell marginally – sans FMG – despite the steelmaking ingredient’s move above $US110/t over the last few days.

The day was dominated by mid-cap Vulcan Energy (ASX:VUL) which announced a binding lithium offtake deal with behemoth Volkswagen Group — the world’s largest automaker by revenue and the largest company in Germany.

Daily Large Cap Materials heat map. Pic: CommSec.

Hydrogen remains an investor gold mine

FMG’s (ASX:FMG) positive move (1.5%) may have been hydrogen related.

It’s renewable energy arm, Fortescue Future Industries (FFI), has formed a JV with domestic utility AGL Energy to look at  converting two coal-fired power plants to produce hydrogen.

FFI is looking to repurpose infrastructure at the 1,680MW Liddell power station in the Hunter Valley region of NSW — earmarked to fully close by April 2023 — along with the 2,640MW Bayswater power station that is forecast to close by 2036.

Initial renewable electricity production through new wind and solar capacity could be 250MW, generating 30,000 t/yr of green hydrogen at a Hunter Energy Hub, FFI said.

Meanwhile, global commodities trading firm Trafigura has announced plans to build an ammonia and hydrogen plant at Port Pirie in South Australia with an initial production capacity of 20 t/d of green ammonia for export by 2025.

Trafigura plans to make a final investment decision by the end of next year, with construction starting in 2023.

 

…while actual gold looks ‘asthmatic’

Gold also edged higher to $US1,786/oz ($2,490/oz Aussie) with the big miners Kirkland Lake (ASX:KLA), and Newcrest (ASX:NCM) responding in kind.

Australia’s biggest gold miner NCM – which is making substantial profits at current prices — is down 5.65% over the past month and 12.81% year-to-date.

 

Jeffrey Halley Senior Market Analyst, Asia Pacific, OANDA says golds “asthmatic” attempt to rise overnight “is a warning that bullishness is very fragile and that selling will resume at the first sign of trouble”.

“The downside continues to be very clearly, the path of least resistance,” he says.

“In the bigger picture, gold still looks confined to a US$1,770.00 to US$1,800.00 range this week, unable to sustain momentum above or below those levels.”

“The 50,100 and 200-day moving averages (DMAs), clustered between US$1,790.30 and US$1,795.50 are capping gains.”

“$1800.00 and $1810.00 will prove equally formidable. Support lies at US$1,770.00 and US$1,760.00.”