BHP Lowers Coal Prices; Iron Ore Prices to Fall

123jump.com Staff
24 Mar, 2009
New York City

Australian personal insolvencies rise 12.2% in 2008. Iron ore contract prices are expected to fall after BHP lowered prices by 57% the coking coal delivered from next week. Resources stocks traded mixed as worries of falling world prices and high operating cost linger for the industry.

[R]3:00AM New York, 7:00PM Sydney- Australian personal insolvencies rise 12.2% in 2008. Iron ore contract prices are expected to fall after BHP lowered prices by 57% the coking coal delivered from next week.[/R]

Australian stocks gained 0.8% despite personal insolvencies soared in 2008 on excessive credit levels over the past 10 years.

Investor sentiment was strengthened after the U.S. announced a $1 trillion public-private sector plan to absorb toxic assets off the balance sheet of banks.

In Sydney trading ASX 200 index gained 0.8% or 29.7 to 3,580.00.

Of the ASX 200 index stocks, 125 increased, 64 declined, and 11 were unchanged. Goodman Group led gainers in the index shares with a rise of 26.7% followed by Virgin Blue Holdings increasing 22.7%.

Australian Personal Insolvencies Rise 12.2% in 2008

The Australian reported today that according to a recent Melbourne University study by Ian Ramsay and Cameron Sim personal insolvencies advanced 12.2% in 2008 as excessive credit levels over the last 10 years increased by 106%.

Corporate insolvencies are also expected to soar this year.

The study also notes that bankruptcy was plaguing the middle-class as more than 27% of Australians who went bankrupt were managers, administrators or professionals.

Most bankruptcies were caused by the inability to pay off the house mortgages.

In addition, the study observes that from 2005 to 2007 there was 700% rise in the number of bankrupt Australians whose creditors were mortgage-finance organizations.

""What the study has shown is that, even in good times, what we are seeing is more Australians becoming bankrupt. Where we are heading now, with the economy, we will see a dramatic increase in those trends. There is obviously a growing section of the community going bankrupt, but it is also happening at a more rapid rate because they cannot control their debts,"" said Professor Ramsay.

Iron Ore Contract Prices to Fall

Dow Jones reported today that Rio Tinto iron ore chief executive officer Sam Walsh says iron ore contract prices will fall this year as demand for steel declines.

However Walsh says prices are unlikely to fall by the 50% forecasted by the market. Companies and customers are in annual iron ore price negotiations for the year starting April.

Aussie Rises

The Australian dollar increased by 0.1% to 70.59 cents against the dollar.

Gainers & Losers

Goodman Group led gainers in the ASX 200 index shares with a rise of 26.7% followed by gains in Virgin Blue Holdings of 22.7%, in Challenger Financial of 16.7%, in ING Industrial of 15.4%, and Babcock & Brown of 13.2%.

Lynas Corp. led decliners in the ASX 200 index shares with a fall of 18.8% followed by losses in Macquarie Communications of 15%, in APN News & Media of 9.7%, in Oz Minerals of 9.3%, and Avoca Resources of 8%.

Resource stocks shed after gold prices dipped 0.4% to $952.50 per ounce. Panoramic Resources declined 6%.