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Market Update

Weakness in Iron Ore Demand Worries Australian Investors


Author: Marcus Jacob
ticker.com
Last Update: 9:10 AM ET March 11 2014

5:00 PM Sydney – Australian indexes turned volatile and investors focused on the lack of new demand for iron ore from China. BHP said it has made numerous short term productivity improvements in its iron ore division. Coca-Cola Amatil’s unit signed a five-year agreement to sell canned fruits to Woolworth.

Australian market indexes closed higher after a choppy session and resource stocks were in focus with a downward bias.

Australian dollar slid to 90.29 U.S. cents and stock market trading turnover jumped to 958 million shares worth $5.1 billion.

The ASX 200 index closed edged up to 2.30 to 5,413.80 and the broader All Ordinaries slid 1.50 to 5,429.30.

Stocks in Review

Rio Tinto added 2 cents to $61.22.

BHP fell 23 cents to $35.93 after the iron-ore producer plans to sell its West African iron-ore exploration assets, the Jimmy Wilson, president iron-ore division said “we want to move out of our West African position.”

The BHP stock was also under pressure after investors feared that China may have hoarded iron ore and recent slide in the commodity price will continue.

The head of the iron ore at BHP, Jimmy Wilson, said at an industry conference that the company has achieved “numerous short term productivity gains” and the company will retain “a favourable position on the iron ore cost curve.”

Woodside Petroleum Limited slid 7 to $38.64.

Westpac jumped 52 cents to $34.29.

Austal Limited slipped 1.1% to 88 cents after the defense vessels maker secured contract for two more littoral combat vessels for the US Navy. These two modern warships will add $684 million to Austal’s order book, raising it to a record $3.3 billion.

On March 10, the company said it won a $125 million contract from an unnamed naval customer in the Middle East.

Coca-Cola Amatil Ltd fell 0.9% to $11.27 after the soft drinks maker subsidiary SPC Ardmona has scored a $70 million supply deal with supermarket giant Woolworths Limited.

Lynas Corporation plunged 8.5% to 27 cents after the rare earth minerals producer reported sales in the first-half ending in December increased to $14.6 million from zero in the prior period.

In the period, the company produced 994 tons of rare earth oxide and sold 627 tons.

Net loss in the quarter widened to $59.3 million compared to $56.6 million a year earlier.

Telstra Corporation Ltd rose 1% to $5.08 after the telecommunications and information service provider was fined for $10,200 after breaching the privacy of approx 15,000 customers as the company failed to take reasonable steps for adequate security of the personal information of customers.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc