Monsters of Rock: Iron ore run puts cherry on the cake as big mining stocks win the week

Iron ore majors rocket on Friday as materials sector enjoys stellar week, up 7%
Gains from the battery metals sector earlier this week have given way for moves in bread and butter commodities
Bowen Coking Coal expands as CEO says met coal demand will remain strong

Sometimes you just need to sit back and smell the roses.

After weeks of deepening economic woes blighted the news cycle and kept a lid on commodities, miners have been uncaged this week as cashed up raiders, bullish punters and the promise of a rebounding China have seen the materials sector lift by a rambunctious 7%.

If it was lithium companies and gold miners chucking the sector on their shoulders early this week, Albemarle’s $5 billion plus bid to take over Liontown (ASX:LTR) more than cancelling out fears about lithium carbonate’s tumble towards US$30,000/t in China and putting LTR up ~73% this week alone, today it was the bread and butter iron ore miners doing the heavy lifting.

Fortescue (ASX:FMG) shares rose 4.07%, BHP (ASX:BHP) was up 2.5% and Rio Tinto (ASX:RIO) gained 2.46% as iron ore prices surged back beyond US$125/t.

“Iron ore futures extended recent gains on hopes for a demand recovery,” ANZ’s Mahjabeen Zaman said in a note.

“Steel consumption was capped by rainy weather in many regions over the past week. This comes amid pollution-induced curbs on steel output and lingering concerns over the property slump.

“The onset of the construction season should further bolster sentiment.”

Those mysterious traders from the Dalian exchange are – (Justin Timberlake voice) ba da ba ba ba — loving it.

Narrator: it didn’t, as usual

Dalian iron ore +1.4% to ¥909

+7.5% in a week…. https://t.co/nFU0LITH6W pic.twitter.com/mnT6c945fh

— David Scutt (@Scutty) March 30, 2023

Monstars share price today:

Junior says coking coal demand will stay strong

From the top end of the global steel supply chain to the junior side in Bowen Coking Coal (ASX:BCB), one of last year’s big movers in the resources space.

Bowen says its boxcut is under way for the third open cut mine development in its Queensland portfolio at Ellensfield South, part of the Burton project where a coal handling and processing plant has been commissioned to wash coal from its Broadmeadow East project.

Board approval has also been received to increase Bowen’s nameplate capacity to 5.5Mtpa from 2.7Mtpa currently.

Coal production at Broadmeadow East began in July last year and has reached a steady state of 0.8-1.1Mtpa, with an anticipated short term increase soon to an annualised rate of 1.5-1.7Mtpa.

Bowen loaded its first capesize bulk carrier at the Dalrymple Bay Coal Terminal with 154,000t of coal for in January. A second shipment of 82,500t sailed on March 14 with regular shipments planned from April.

Cash flows and an amended debt financing facility with Taurus Mining Finance is expected to support the $18m refurbishment of the second stage of the CHPP. While it has ramped up through a period of disrution and cost inflation, Bowen CEO Mark Ruston says metallurgical coal markets are expected to remain strong.

While thermal coal prices have more than halved this year, top grade steelmaking coal was fetching US$321/t on March 27 the company said.

“At a time when Bowen is significantly ramping up production, we believe that strong coking coal prices will be here for some time to come,” Ruston said.

“The expected re-entry of China, the world’s largest steel producer, is likely to make up lost ground this year after ending its strict zero-COVID policy, which has previously dampened growth and its associated steel and metallurgical coal demand.”