Iron ore miners rise on contract hopes
The Age
Thursday January 7, 2010
HIGH prices on the spot iron ore market are fuelling speculation that Australian producers will secure high contract prices in their negotiations this year with Asian steel makers.Mining stocks made good gains yesterday but the S&P/ASX 200 Index closed just 1.6 points, or 0.03 per cent, higher at 4925.9 points.Iron ore exporter Fortescue Metals was the mining standout, surging 60, or 13 per cent, to $5.20.BHP put on 54, or 1.3 per cent, to $43.82 and Rio Tinto jumped $2.23, or 2.9 per cent, to $78.58.Another big gainer was Sims Metal, which jumped $1.23, or 5.5 per cent, to $24.73. Sims recycles scrap metal, including iron, and resells it on the open market.ANZ's head of commodity research, Mark Pervan, said shares in the iron ore producers had been buoyed by broker reports that contract prices with Asian steel makers might exceed expectations.Prices for instant delivery (spot prices) were at $US120 a tonne compared with the $US65-a-tonne contract price set last year.The effect of the miners' gains on the benchmark index was almost eclipsed by losses in the big banks. NAB took the biggest hit, sliding 54, or almost 2 per cent, to $27.21, ANZ sagged 34, or 1.5 per cent, to $22.66 and Westpac was off 12 at $25.39. Commonwealth Bank closed 28 higher at $55.98.Meanwhile, the dollar finished the Australian session almost steady at US91.44 but slid back to US91 in early trade in London.European currencies continue to weaken against the Aussie because of slower economic conditions. Last night the dollar was buying 57.26 pence, close to the 24-year high of 57.4 pence reached last year, and 63.67 euro cents.Extremely cold weather in the northern hemisphere continued to lift oil prices. West Texas intermediate crude was selling for $US81.68 a barrel, close to last year's high of $US82.58.–Jillian Broadbent has been appointed as a non-executive director of the Australian Securities Exchange. She will replace Trevor Rowe, who is expected to retire from the board at this year's annual meeting. Ms Broadbent is also on the board of the Reserve Bank.
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