The worst is over for mining stocks, according to Argonaut head of research Hayden Bairstow.
The year started poorly for equities but Bairstow told the Tribeca Future Facing Commodities Conference in Singapore that green shoots were emerging.
“We are seeing a little bit of a glimmer of hope,” he said.
Of the 50 or so presenting companies at the conference this week, roughly two thirds had experienced share price gains over the past month.
Bairstow said momentum was building and encouragingly, it was across most commodity groups.
“We’re seeing a decent recovery across the board,” he said.
“We are off the bottom and it’s all looking quite positive.”
Lithium was the worst-performing commodity in 2023, but Bairstow believes the price has “probably” bottomed.
Pilbara Minerals and Albemarle Corporation have auctioned lithium cargoes at prices above spot in recent weeks.
“Those sort of negative momentum stories are slowing and in fact, have turned to the positive,” Bairstow said.
Still, share prices of lithium producers had outperformed price.
While prices fell by more than 80% in 2023, Pilbara and Mineral Resources were down by around 20% each since the peak, while IGO and Arcadium Lithium were down 50%.
“The intriguing thing is the market at the big end is happy to look through the lithium price fall and the trough,” Bairstow said.
So far in 2024, the shining lights in the mining market have been uranium and gold.
“In terms of importance in the Australian market, gold really does dominate,” Bairstow said.
The merger of Newcrest Mining and Newmont Corporation late last year pushed the size of the ASX gold space to beyond A$100 billion.
Meanwhile, uranium prices rose to more than US$100 per pound in January, driving a strong performance in equities.
Bairstow said most uranium stocks were up 100-150% over the past 12 months.
“It’s been nothing short of extraordinary,” he said.
