Market Wraps

Evening Wrap: Iron ore prices hit a 4-month low, Chile plans to nationalise lithium industry

Fri 21 Apr 23, 4:43pm (AEST)

 The S&P/ASX 200 closed 32 points lower, down -0.43%. 

Iron ore prices tumble to a 4-month low, Australia's manufacturing PMI falls to a 35 month low amid an accelerated decline in new orders, Chile announces plans to nationalise its domestic lithium industry and a massive week ahead for US first quarter earnings.

Let's dive in.

Today in Review

Fri 21 Apr 23, 4:26pm (AEST)

Name Value % Chg
Major Indices
ASX 200 7,330.4 -0.43%
All Ords 7,523.0 -0.43%
Small Ords 2,893.7 -0.07%
All Tech 2,265.6 +0.06%
Emerging Companies 2,141.7 -0.56%
AUD/USD 0.6708 -0.50%
US Futures
S&P 500 4,150.5 -0.05%
Dow Jones 33,877.0 -0.09%
Nasdaq 13,077.0 +0.02%
Name Value % Chg
Industrials 6,858.1 +0.66%
Health Care 44,459.4 +0.62%
Energy 10,662.4 +0.57%
Utilities 8,565.2 +0.43%
Consumer Discretionary 3,083.6 +0.08%
Information Technology 1,567.8 +0.03%
Communication Services 1,545.0 -0.14%
Consumer Staples 13,568.6 -0.20%
Real Estate 3,084.9 -0.33%
Financials 6,332.5 -0.66%
Materials 18,331.0 -1.48%

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ASX 200 Session Chart

ASX 200 intraday
ASX 200 recoups some of its early losses and trades sideways through to close (Source: Market Index)


Perhaps the most interesting session we've had all week. Sectors held up relatively well but the weight of miners and banks dragged the index lower. The market is beginning to edge towards the downside after a powerfully rally from late March lows.

  • Materials underperformed as Singapore iron ore futures tumbled 4.9% to US$109 a tonne, the lowest level since December 2022

  • Financials were heavy, Bank of Queensland was hit by multiple broker downgrades which flagged headwinds such as margins peaking, asset and deposit competition and rising expenses


Australia’s Manufacturing PMI fell to 48.1 in April from 49.1 in March, according to Judo Bank.

  • Second straight month of decline to a 35 month low

  • “The overall decline in the health of the sector was largely due to a solid and accelerated fall in new orders.”

  • “Firms continued to expand staffing levels … the rate of increase eased to the softest over this period (two and a half years) amid waning demand and declining backlogs of work.”

  • “The rate of input cost inflation slowed for the third month running and was the softest since August 2020.”

Australia’s Services PMI jumped to 52.6 in April from 48.6 in March. 

  • The index accelerated at its fastest pace since June last year to a 10 month high

  • “Input costs continued to increase rapidly in April, often linked to higher salary payments.” 

  • “However, the rate of inflation softened to a 17-month low.” 

Latest news

Market Insights

Iron Ore: A fresh 4 month low

Singapore iron ore futures are down 6.8% in the last two sessions due to subdued buying interest from Chinese steel mills and a build up in port inventories.

Earlier this week, China's NDRC said it will adopt measures to secure iron ore supply, adjust demand for the commodity and strength market supervision to curb unreasonable price increases.

Is this more a symbolic move that's weighing on iron ore prices and sentiment? Or is demand starting to become an issue?

FEF2! 2023-04-21 16-11-36
Year-to-date Singapore iron ore futures (Orange) vs. Fortescue (Blue)

Lithium: Chile news

Chile's President said he plans to nationalise the country's lithium industry, transferring control of assets from names like SQM and Albemarle to a separate state-owned entity.

"It poses a fresh challenge to electric vehicle (EV) manufacturers scrambling to secure battery materials, as more countries look to protect their natural resources. Mexico nationalized its lithium deposits last year, and Indonesia banned exports of nickel ore, a key battery material, in 2020," Reuters said in a report.

This helped Pilbara Minerals (ASX: PLS) bounce from session lows of -3.60% to a 3.3% close.

Pilbara Minerals Ltd (ASX PLS) Share Price - Market Index
Pilbara Minerals intraday chart (Source: Market Index)

Next week: US Earnings

Next week, 42% of the S&P 500 market's cap will report.

So far, bank results have been better than feared but Tesla's disappointing earnings might've killed the risk bid that we've seen across megacap tech stocks.

Earnings surprises and beats have softened in the past few days, with just under 77% of reporters beating earnings expectations.

Interesting news and movers

Trading higher

  • +5.9% Whitehaven Coal (WHC) – Q3 production

  • +4.75% Lynas (LYC) – Q3 production

Trading lower

  • -15.1% Calidus Resources (CAI) – Capital raising

  • -9.1% Livewire (LVH) – To acquire Arrived for up to $5.92m in stock

  • -5.0% Bank of Queensland (BOQ) – Downgraded by multiple brokers

  • -3.7% Iluka Resources (ILU) – Downgraded by multiple brokers 

  • -2.8% Rio Tinto (RIO) – Q3 production (Thurs)

  • -2.3% BHP (BHP) – Q3 production 

Broker updates

Macquarie notes:

Allkem (AKE) – Outperform with $16.70 target price

  • “AKE’s 3QFY23 result was mixed with higher-than-expected production offset by lower shipments.”

  • “4QFY23 lithium pricing guidance was mixed with weaker LCE pricing while

  • spodumene prices were largely in line with our forecasts.”

  • “On our forecast, AKE is trading on free cash flow yield of 11% and 18% for FY24e and FY25e, respectively.”

Bank of Queensland (BOQ) – Underperform with $6.15 target price 

  • “With considerable margin compression, limited proof of underlying sustainable cost out, and BOQ unable to cover its cost of capital, we see risk of further consensus earnings downgrades.”

IGO (IGO) – Outperform with $19.00 target price 

  • “Essential Metals shareholders have voted to reject IGO and Tianqi’s A$0.50/share A$134m cash takeover offer at the Scheme Meeting.”

  • “The failure to complete the takeover of ESS is disappointing, and we await TLEA’s response with interest.”

Iluka Resources (ILU) – Neutral with $12.00 target price

  • “ILU’s 1QCY23 result was soft with weaker-than-expected production and sales, which translated to lower revenue generation in the quarter.”

  • “This impacted revenue and cash generation in the period; however, 1Q is typically seasonally softer and given the lift in zircon prices and inventory on hand, we expect a recovery over the remainder of CY23.”

  • “ILU has numerous catalysts and growth paths including Eneabba phase 3 which is progressing and the Balranald, which had now achieved FID.”

Rio Tinto (RIO) – Neutral with $122.00 target price

  • “The record shipment result for Pilbara Iron Ore was a key positive for RIO, offsetting weaker volumes in copper, bauxite, titanium dioxide and precious metals.”

  • “RIO’s upgrade momentum has stalled with a spot price scenario generating earnings for CY23 in line with our forecasts, however there is 28% upside to our CY24 estimates at spot.” 

Zip (ZIP) – Underperform with $0.50 target price

  • “It appears ZIP will achieve cashflow breakeven without the need for a capital raise in the near term.” 

  • "The balance sheet, however, remains a concern with the remaining $330m of convertible notes due in Apr-25 the main overhang.”


Top Gainers

Code Company Last % Chg
8IH 8I Holdings Ltd $0.066 +65.00%
OLL Openlearning Ltd $0.027 +28.57%
MCM MC Mining Ltd $0.21 +27.27%
SLM Solis Minerals Ltd $0.14 +27.27%
OM1 Omnia Metals Grou... $0.315 +23.53%
View all top gainers

Top Fallers

Code Company Last % Chg
HVM Happy Valley Nutr... $0.027 -22.86%
AR3 Australian Rare E... $0.495 -19.51%
MHK Metal Hawk Ltd $0.125 -19.36%
APS Allup Silica Ltd $0.051 -17.74%
PRS Prospech Ltd $0.029 -17.14%
View all top fallers

52 Week Highs

Code Company Last % Chg
EQX Equatorial Resour... $0.175 +20.69%
WMG Western Mines Gro... $0.56 +19.15%
IPD Impedimed Ltd $0.143 +18.75%
RXH Rewardle Holdings... $0.021 +10.53%
DSE Dropsuite Ltd $0.265 +8.16%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
HVM Happy Valley Nutr... $0.027 -22.86%
CAI Calidus Resources... $0.22 -16.98%
EM2 Eagle Mountain Mi... $0.135 -15.63%
GEN Genmin Ltd $0.155 -13.89%
PPY Papyrus Australia... $0.028 -13.85%
View all 52 week lows

Near Highs

Code Company Last % Chg
WVOL Ishares Edge MSCI... $36.42 -0.08%
CHN Chalice Mining Ltd $7.91 +1.02%
CTD Corporate Travel ... $21.13 +0.33%
IHD Ishares S&P/ASX D... $13.14 -1.13%
FLT Flight Centre Tra... $19.02 +0.42%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
NVX Novonix Ltd $0.98 -2.49%
OBL Omni Bridgeway Ltd $2.275 +0.22%
WAX Wam Research Ltd $1.165 -2.10%
BUB Bubs Australia Ltd $0.20 0.00%
RFF Rural Funds Group $1.95 0.00%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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