WA Index

The aggregate market capitalisation of Western Australian listed companies continued to pull back over the month of May – down 4.4% - to close at $318.0 billion. The decline was consistent with the continued downward pressure on the price of WA-reliant commodities such as iron ore and gold.

Most other global markets rallied towards the end of the month, to close broadly flat, having experienced sharp retractions early in May.

Download the list of WA’s top 100 listed companies, as of 31 May 2022, explore the sections below, and if you do not currently receive our WA Index, please register to be added to our distribution list.

Highlights:

• Commodity review
• Performance of WA Index and global indices
• WA Index movement
• Top performers of the month.

If you have any questions in relation to the Deloitte WA Index please contact Dave Andrews.

Commodity Review:

The month of May saw continued declines across the broader commodity market, with only thermal coal, crude oil, lithium and platinum finishing higher. Conversely, tin, palladium and nickel were most affected, suffering low double-digit losses.

• Thermal coal finished 49% up from the previous month, due to further supply constraints resulting from the war in Ukraine and the unprecedented economic sanctions on Russian exports, resulting in increased demand from the EU and Japan for seaborne thermal coal supply
• Crude Oil prices rose 12% following the EU’s announcement of additional sanctions on the purchase of Russian crude that will see a 90% reduction in imports by the end of the year
• Nickel prices fell 11% following a continued decrease in demand from stainless steel plants that rely on the commodity, particularly in China which continues to battle the COVID-19 pandemic. Increased production in Indonesia worked to alleviate previous supply issues experienced globally in early 2022
• Tin prices closed 14% lower than April due to a fall in demand as eastern China imports were down significantly as a result of a stalled COVID-related economic activity.

Performance of WA Index and global indices:

WA Index movement

Top 20 performers of the month

Western Australian top performers over the past month by growth in market capitalisation

• Mineral Resources Ltd’s (ASX: MIN) market capitalisation increased 9.1% through May on the back of the completion of its US$1.25 billion senior unsecured notes offering. The company plans to use the proceeds for general corporate purposes, including capital expenditures. Additionally, Energy Resources Limited, a wholly-owned subsidiary, recently obtained a 25% permit interest and operatorship of area L20-1 in Western Australia’s Carnarvon Basin.
• Perseus Mining Limited (ASX: PRU) experienced 7.7% market capitalisation growth during May, largely due to the completion of its acquisition of all outstanding shares of Orca Gold Inc, a Canadian gold developer whose primary asset consist of a 70% interest in the block 14 gold project in northern Sudan.
• Lynas Corporation Limited (ASX: LYC) saw a 7.5% increase in market capitalisation in May, attributed to continued strong demand for rare earths and further positive sentiment around the future for electric vehicles and wind turbines.

The top Deloitte WA Index Movers and Shakers in May were:

• Galileo Mining Limited’s (ASX: GAL) market capitalisation soared 597.4% during May, following recent drill results and, in particular, the announcement of rare and precious metal rhodium in drill assays from the Callisto discovery at the Norseman project in WA. Norseman also returned significant palladium-platinum-gold-copper-nickel mineralisation from six drill holes earlier in the month.
• Arafura Resources Limited (ASX: ARU) saw an uplift of 21.8% over the month, following the signing of a non-binding MoU to negotiate an offtake agreement for the supply of 1000-15000 tonnes per annum of neodymium and praseodymium, for a seven-year term from 2025. Both companies intend to work towards a binding offtake agreement by September 2022.
• Argosy Minerals (ASX: AGY) experienced a 13.2% increase in market capitalisation in May, on the back of announcing that the company remains on schedule to achieve first production of >99.5% battery quality lithium carbonate during Q3 CY2022.

If you don’t currently receive our WA Index, you can register to be added to our distribution list.

If you have any questions in relation to the Deloitte WA Index please contact Dave Andrews.