Monsters of Rock: Investors desert large cap miners, even though they dig coal

Even coal and lithium companies struggle as down day hits ASX mining and energy stocks
Lynas Rare Earths one of the few in the green
Hastings nets placement to advance rare earths production

After a procession of gains that have driven stocks in lithium and coal to new records in recent days, investors have deserted large cap miners as Chinese demand signals and global economic concerns overpowered tailwinds from supply shortages and power crunches.

Normal business could well resume tomorrow, but it’s a pity party today and everyone’s invited. The activity’s been somewhat savage, with Whitehaven Coal (ASX:WHC) falling from record highs by 3.64% to $8.48/share, New Hope (ASX:NHC) off 5.42%, Coronado (ASX:CRN) down 4.91% and Yancoal (ASX:YAL) sliding 0.89% after starting of the day in the green.

Pilbara Minerals (ASX:PLS), which hit a record high of $3.96 yesterday on a bullish broker upgrade from JP Morgan also dropped slightly.

$9 billion capped lithium miner Allkem (ASX:AKE) on the other hand hit a new high of $14.08, Core Lithium (ASX:CXO) gained 2% and finished just shy of a record and Lynas Rare Earths (ASX:LYC) lifted 0.6% to $8.45.

Materials stocks fell 2.06% led by bigger losses from BHP (ASX:BHP) and Fortescue (ASX:FMG), while energy tumbled 2.88%.

Rare enthusiasm in rare earths

Lynas interestingly has a reputation as a market darling which doesn’t really fit with its 2022 performance.

Having generated a record year in profit terms, earning the $7.5b company the Digger of the Year award at this year’s Diggers and Dealers Mining Forum in Kalgoorlie, Lynas is actually down 23.39% year to date, well off the $11.39 high it hit in April this year.

One explanation could be falling quoted prices for rare earths materials, which like other commodities have been affected by a slow down in Chinese economic activity.

Having traded at over US$170/kg earlier this year, NdPr oxide is currently being quoted at around US$85/kg by the Shanghai Metals Market.

Rare earths remain a key thematic for investors in the Australian mining sector though, with Hastings Technology Metals (ASX:HAS) collecting $110 million in a placement to progress its Yangibana mine, which it plans to commission by mid-2024.

The company received a $150m cornerstone investment from Andrew Forrest’s Wyloo Metals last month to bankroll the acquisition of 22.1% of Canadian permanent magnets producer Neo Performance Materials.