Monsters of Rock: Terracom shows coal is paying, iron ore miners make gains and Perth Mint tops 1Moz
Link copied to
Thermal coal is also back on the up after Indonesia, one of the world’s largest exporters, introduced an export ban this week.
While some analysts believe it will be short-lived, it is driving pressure on prices in the short term, with energy coal climbing almost 10% overnight according to Commsec.
— CommSec (@CommSec) January 6, 2022
Australian coal miners are enjoying buoyant prices for the commodity right now, helping them recover from the dark early days of the pandemic.
Terracom (ASX:TER), which owns the Blair Athol mine in Queensland as well as operations in South Africa, is a case in point.
Across the June quarter last year coal from Blair Athol in the Bowen Basin fetched US$94.1/t on average, at a time when the company was working on a now completed refinancing package to reduce its operating risk.
In the December quarter, the company announced today, it sold its Australian coal at an average of $219/t.
It delivered 502,000t from Blair Athol across the December quarter and plans to produce 2.3Mt this financial year.
That would have been even more had a third 79,000t shipment in December, delayed to January 5 because of wet weather, set sail before the end of the year.
Terracom’s two December shipments average a sail price of $213/t Aussie.
Iron ore continues to defy forecasts of its decline early in 2022 with strong buying from traders ahead of next month’s Beijing Winter Olympics spurring the commodity to its strongest prices in around three months.
Prices for benchmark 62% iron ore on some indexes topped US$128/t overnight, while futures have also rallied.
— CommSec (@CommSec) January 6, 2022
Singapore 62% swaps for February, which sunk to US$85.17/t in mid November, are now buying US$126.85, while Dalian Futures for May delivery are similar solid, trading at US$111.66/t today.
It has driven the big end of town to a strong finish to the year’s first trading week.
Fortescue Metals Group (ASX:FMG) was up ~3.2% to lead the large cap stocks on the ASX, pushing its share price back through the important $20 a share barrier to $20.38.
The materials sector was up 1.16% and 2.29% for the week despite the ASX’s massive Thursday fall, and 8.53% higher over the past month, driven by rising prices and interest in iron ore miners and lithium stocks.
Gold is in a strange funk, marooned at price levels near enough to record highs but with sentiment for large equities circling the toilet bowl.
The yellow metal encountered a mild blip in 2021, with bullion prices hobbling to a 4% decline over the year, but prices are still high enough to spur Australian miners to record production.
With Australia having already briefly taken China’s crown as the world’s largest gold miner in the past year, production is forecast by Federal analysts to rise from 321t in 2020-21 to 362t in 2021-22 and 374t in 2022-23 (377t in exports).
Most of those are traded through the Perth Mint, which sold more than 1Moz in 2021 it revealed today, its highest figure over the past decade.
Perth Mint sold some 1.05Moz of gold bullion and recorded minor inflows in December of 700oz to its ASX listed ETF, which ended 2021 with total holdings at an all time high.
The Mint’s Manager of listed products and investment research Jordan Eliseo said gold demand was robust despite headwinds restricting prices.
“Despite these headwinds, demand was robust, evidenced through physical bar and coin purchasing, a recovery in consumer demand and strong central bank purchasing, with the global gold ETF market the only weak sector in 2021,” he said.
“The Perth Mint generated record sales of gold in 2021, with more than 1 million ounces of gold and more than 19 million ounces of silver in minted product form sold over the year.
“At the end of 2021, total holdings of Perth Mint Gold (ASX:PMGOLD) were 243,430 ounces – the highest in the ETP’s history.”
Perth Mint said the total value of its PMGOLD holdings were $609m at the end of 2021.