The market capitalisation of Western Australian listed companies declined slightly over the month of April 2022 – down 1.4% to close at $332.5 billion. While most global markets lost significant ground as inflation continues to run hard, the WA Index held up comparatively well.
If you have any questions in relation to the Deloitte WA Index, please contact Dave Andrews.
In what was a rare, diminishing month, thermal coal, coking coal and palladium were the only commodities to finish higher. Conversely, LNG, aluminium and iron ore lost the most ground. Gold continued to languish, just shy of US$2,000/oz, despite continued uncertainties stemming from the Russia and Ukraine conflict.
Thermal coal finished 14% higher at the close of April due to further supply issues resulting from the war in Ukraine. In 2021, Europe imported 32% of Russia’s exported coal, however current sanctions on Russia have led Europe to pursue alternatives from other sources.
LNG prices closed 31% lower following decreased Chinese demand. China’s zero-tolerance COVID-19 approach remains in place, which again halted much of the Chinese economy, resulting in reduced demand for LNG.
Aluminium prices fell 13% in April following a record-breaking March. Given China remains the world’s largest consumer of aluminium, lockdowns have resulted in decreased infrastructure related activities and material demand.
Iron ore prices finished 9% lower and, like most commodities, experienced a tumultuous April due to China’s current COVID-19 approach and consequent lockdowns.
Performance of WA Index and global indices
WA Index movement
Top 20 performers of the month
Paladin Energy Ltd (ASX: PDN) experienced a 14.6% growth in market capitalisation in the month of April on the back of a successful A$200m placement that received significant interest from institutional investors in Australia and overseas. Paladin aims to use the proceeds to fund the restart of its internationally significant uranium Langer Heinrich Mine in Namibia. The company also disclosed that it secured a tender award for an offer to supply uranium concentrates to a subsidiary of Fortune 150 North American power utility Duke Energy over a six-year period beginning in 2024.
Mineral Resources Ltd (ASX: MIN) saw an 11.1% increase in April, primarily due to the company reaching an agreement with joint venture partners to increase production at their West Australian spodumene mines. The company also announced that third-party spodumene concentrate was fed into its Kemerton lithium hydroxide plant with the first product from Train 1 expected by May 2022. Furthermore, Q3 iron ore shipments grew 22% (from the previous corresponding period) due to growth at the Utah Point Hub in Western Australia.
Fortescue Metals Group Limited (ASX: FMG) saw a 4.7% increase, following the release of its Q3 production results that highlighted record year-to-date iron ore shipments and an uplift in guidance for expected FY22 shipments to 185-188mt. The company also completed the acquisition of Williams Advanced Engineering for US$221m, and announced the development of a zero emissions Infinity Train. Fortescue Future Industries commenced construction of its Green Energy Manufacturing Centre in Gladstone, Queensland.
The top Deloitte WA Index Movers and Shakers in April were:
Jindalee Resources Ltd (ASX: JRL) saw an uplift of 38.9% in market capitalisation over the month of April, following the announcement the company will separate its Australian-based assets into a new standalone company to re-position itself as a pure US lithium developer. The decision was well received by investors, given the recent invocation of the Defence Production Act in the US to accelerate production of battery materials, including lithium.
Bannerman Energy Ltd (ASX: BMN) grew 28.5% in market capitalisation over the month, following a surge in uranium pricing over the last quarter as the sector focused on supply security amid risks of disruption to nuclear fuel markets from the Ukraine war. The company also noted its Entango-8 definitive feasibility study was progressing to plan, in line with its original timeframe and budget.
Boss Energy Limited (ASX: BOE) climbed 20.9% during April, owing to the successful completion of its $125m equity raising, which was heavily oversubscribed. Further uncertainty surrounding possible sanctions on Russian nuclear fuel exports fuelled uranium prices over the last quarter – another positive for the company.