Monsters of Rock: The second half of 2021 isn’t looking half bad for commodity prices, CommSec says
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A wrap of the news from the ASX’s biggest miners.
CommSec says the outlook for Aussie-listed miners remains favourable amid expectations for still elevated commodity prices, strong cashflows, and high dividends.
Prices for commodities like iron ore and copper – which hit all-time highs this year – are still expected to soften from the heady heights of H1 2021.
“CBA Group strategists recently updated their energy and mineral price forecasts on expectations that China’s commodity demand outlook may ease in the second half of 2021, partially offset by strengthening demand outside of China and the continuing transition to a low carbon global economy,” it said today.
Materials gained another 0.16% Tuesday for a five day gain of 2.97%, with miners IGO, FMG, and Lynas Rare Earths leading the charge.
IGO once again gained as exploration heats up near its world class Nova nickel-copper operation in the Fraser Range of WA.
The major recently sold its 30% in the Tropicana gold mine to Regis Resources (ASX:RRL) for $903m as it pivots towards battery metals, including lithium via a stake in the Tianqi Joint Venture.
The $6.48 billion market cap stock is up 27.3% in 2021, and 70% over the past 12 months.
Major iron ore players like FMG are making eye-watering profits in 2021 as benchmark prices remain stubbornly above $US200/t.
But FMG is also jumping into another red-hot sector – green hydrogen – in efforts to be carbon neutral by 2030.
“At Fortescue, we are leading the heavy industry battle against global warming, transitioning from being a major fossil fuel importer to a significant green and renewable energy and product exporter,” CEO Elizabeth Gaines says.
“We are leading by example to decrease emissions across our operations, using our large industrial platform of operating mine sites in the Pilbara to trial and demonstrate technologies in completely renewable green hydrogen, green ammonia and green electricity.”
The $77.8 billion market cap stock is up 2% year-to-date, and 65% over the past 12 months.
As the only scale producer of separated rare earths outside China, Lynas has a massive head start on the rest of the pack.
It currently supplies ~ 20% of world demand for separated rare earth products.
By 2025, the company is targeting NdPr production capacity of at least 10,500 tonnes per annum, with a new Kalgoorlie processing facility able to feed to downstream operations in the US and Malaysia.
The $5.8 billion market cap stock is up 54% in 2021, and a whopping 222% over the past 12 months.