5:30 PM Sydney – Australian market indexes traded higher in heavy volume and Aussie dollar continued its slide after iron ore prices fell to a new five-year low. Iron ore prices extended 55% losses in thirteen months on the rising production in Australia and softening demand in China.
In active trading, Australian market indexes advanced despite the overnight plunge of near 4% in iron ore prices. Aussie dollar continued its slide following weak oil and base metal prices.
Australian dollar closed at 79.38 U.S. cents and in stock-trading turnover jumped to 847 million shares worth $5.26 billion.
ASX 200 Index gained 45.40 or 0.8% to 5,547.20 and broader All Ordinaries Index increased 43.30 to 5,511.50.
In commodities trading, gold declined US$19 at US$1,278 an ounce and light crude oil fell 44 cents to US$45.15 a barrel. Brent crude increased 21 cents to close at US$48.26 a barrel.
Iron ore prices traded down 4% before rebounding to close at a five-year low to $63.30 a ton for Tinajin Port delivery, according to The Steel Index.
However, the outlook for the ore price are bleak as some forward contracts are pricing $60 a ton level.
Three largest Australian iron ore producers are expected to continue production expansion despite the recent 50% price plunge in the last thirteen months. Australian production increased 20% in 2014 and manufacturing is expected to expand another 5% in the current year.
Despite the current price level of $60 a ton, Australian manufacturers are expected to be profitable with production cost hovering near $25 a ton.
Australian Stock Movers
iProperty Group Ltd
soared 12.1% to $2.96 after the Malaysia-based online property information provider reported revenues in the fourth-quarter ending in December surged 57% to $8 million from third-quarter and climbed 29% from a year ago period.
Ingenia Communities Group Limited
closed unchanged at 19 cents after the real estate developer agreed to acquire Sydney Hills Holiday Park located in the Hills district for about $12 million.
Liquefied Natural Gas Limited
surged 16.4% to $3.05 after the natural gas producer said cash balance at the end of 2014 was $53.2 million and the company has no debt.
The company made substantial progress recently with the United States Patent and Trademark Office for the core liquefied natural gas processing design.