Stockpile: Positive data lifts commodities and markets

Finance

Positive data, including lower stockpiles of warehoused metals and better than expected jobs data in the US, has helped support base metals prices this week.

The share prices of London’s largest producers have responded, with the likes of Rio Tinto, Xstrata plc and Anglo American plc all gaining by over 8% in the week. Even BHP Billiton, which is currently involved in a US$39 billion hostile bid for Potash Corporation of Saskatchewan Inc, gained 6% in the week.

Aquarius Platinum Ltd was the top gainer on the main board, up 14% in the week. A note from RBC Capital Markets on Thursday, upgraded the stock from ‘sector perform’ to ‘top pick’ with a £3.50/share target price from £3.30 before.

The RBC note said: “Having taken the tough decisions, we firmly believe that the growth profile and reduced risk associated with Aquarius should see the market paying more attention to the forecast growth potential.”

Ukrainian iron ore pellet producer was also one of the top gainers, helped by Friday’s announcement that production for the first eight months of the year was almost 16% higher than the comparable period in 2009, reaching 6.5Mt. Production in the month of August was down on July’s levels, but 1.1% higher than August 2009.

Creat Resources Holdings Ltd had a mixed week, ending as the top gainer, but nearly making the biggest faller list. On Friday it was announced that shareholder Creat Group Ltd, had provided Creat Resources with a US$14 million bridging loan towards the development of a lithium-processing plant in China. Creat Resources owns a near 20% stake in Galaxy Resouces Ltd which is developing the project.

In a statement, Creat said: “The bridging loan has been arranged as short-term finance until Galaxy completes the documentation process on a planned US$105 million project finance facility from China Development Bank and Austria’s Raiffeisen Zentralbank Österreich AG.”

No news from the second top riser, Sunkar Resources plc. Although with fertiliser now in the sights of miners like Vale and BHP Billiton, the Kazakhstan phosphate company may be getting some extra attention from the market.

A strong set of results on Wednesday helped Anglo Asian Mining plc move higher. The gold producer out of Azerbaijan announced a maiden profit of US$6.2 million from revenue of US$28.4 million for the six months to end-June. The company expects 60,000oz for the full year.

Beowulf Mining plc fell the most out of the AIM miners this week. The Swedish minerals explorer reported a loss of £221,968 for the six months to end-June, more than the £190,547 loss recorded a year earlier.

A very positive note on fluorspar explorer, Tertiary Minerals plc, may have helped boost the share price of peer Maghreb last week. The stock which was up 55% by last Friday, retreated by 12% this week. Tertiary failed to continue its gains, but is still trading around the £0.05/share level, compared with just £0.02/share prior to the research.