Australian Resource Stocks Struggle on Weak Iron Ore Prices

Marcus Jacob
21 Jul, 2014
New York City

Stocks in Australia gained but resource stocks were under pressure as smaller iron ore mining companies report larger than expected decline in prices.

[R]5:00 PM Sydney, Australia – Stocks in Australia gained but resource stocks were under pressure as smaller iron ore mining companies report larger than expected decline in prices.[/R]

Trading on exchanges in Sydney was thin and banks led the session. Resource stocks were under pressure after Arrium Limited reported record iron ore production but prices in the June quarter dropped 3% from a year ago quarter to $60 a ton.

Australian dollar closed at 93.90 U.S. cents and stock trading turnover declined to 528 million shares worth $2.8 billion.

ASX 200 index rose 8.20 to 5,539.90 and the broader All Ordinaries gained 9.50 to 5,528.70.

Stocks in Review

APA Group gained 1% to $7.15 after the natural gas infrastructure services provider won a $140 million contract from AngloGold Ashanti Limited to transport natural gas to the Sunrise Dam and Tropicana gold mines in Western Australia.

Arrium Limited declined 3% to 76 cents after the company reported a 30% drop in iron ore prices in June quarter.

Australand Property Group slid 0.2% to $4.49 after the industrial property developer reported revenue in the first-half ending in June declined 15% to $332 million from $391.5 million a year earlier.

Net profit in the period surged 49% to $131.5 million compared to $88.4 million a year ago period.

The property group forecasted earnings per share for the year to jump between 10% and 15% in next two years.

Quickflix Ltd surged 40% to 0.014 cents after the online movie and retail service provider confirmed that Nine Entertainment Company acquired 8% stake held by HBO valued at $1 million.

Service Stream Limited jumped 2.5% to 20.5 cents after the communication network service provider secured a five-year contract with SA Power Networks.