3 Junior Iron Ore Miners - MIN, MGX, BCI?

  • May 12, 2019 08:30 AM AEST
  • Team Kalkine
3 Junior Iron Ore Miners - MIN, MGX, BCI?

Iron ore prices are on a rollercoaster ride amid vague fundamentals in the international market. However, the prices improved quite significantly in April amid high demand supply disruption caused by Vale’s ban and production cut by significant Australian miners such as Rio Tinto (ASX: RIO) and BHP Billiton (ASX: BHP) amid impact on operations in Pilbara Region by the Tropical Cyclone Veronica.

On the demand side the, steel demand in China remained high during April amid improvement in manufacturing activities in China. The mills in China procured iron ore in large quantity to produce the steel to meet the domestic demand. However, despite the high production steel inventory in China, fell in April, which in turn, supported the prices of hot-rolled steel (HRC) and steel rebar prices in China, which in a cascade coupled with low supply ablaze the iron ore prices.

In the absence of supply from significant Australian miners. The junior miners in the Australian market dived in and gained the momentum in share prices from late March to April.

Mount Gibson Iron Limited (ASX: MGX)

The share prices of the company improved substantially in April. The prices inched up from the level of A$ 0.940 (Day’s low on 1st April 2019) to the level of A$1.242 (Day’s high on 16th April). The stock saw a retracement in prices after making a high of A$1.242 to the level of A$0.950 (Day’s low on 18th April). The stock is currently moving in an uptrend and is making a symmetrical triangle formation on the daily chart.

Source: Thomson Reuters; MGX Daily Chart

Following the development on a daily chart, it can be seen that the chart is forming a symmetrical triangle pattern and either side breakout of it will decide the further trend in it. The prices are currently trading above its 7-days exponential moving average (EMA), which is at A$1.172. The 20-days EMA is below the 7-days EMA and is at A$1.131.

Mineral Resources Limited (ASX: MIN)

The share price of the company soared from the level of A$15.030 (Day’s low on 28th March 2019) and moved in an uptrend during April 2019 and made a high of A$17.230 on 9th April 2019. However, the prices again plunged from the level of A$17.230 to mark a low of A$14.970 (Day’s low on 6th May 2019).

Source: Thomson Reuters; MIN Daily Chart

The stock of the company witnessed a double bottom pattern on the daily chart, and the prices recovered significantly from the level of A$15.030. However, the prices slid below a short-term support line and trying to retest it further. A further breakout of this line or the failure to do so will decide a new trend of the share prices of the company.

The prices are currently trading below its 7, 20,200 days EMA, which are at A$15.447, A$15.794, and A$15.898.

BCI Minerals Limited (ASX: BCI)

The share price of the company increased from the level of A$0.150 (Day’s low on 28th March 2019) to the level of A$0.175 in April. Along with other performance metrics, the high iron ore prices supported the stock of the company.

Source: Thomson Reuters; BCI Daily Chart

Following the development on a daily chart, it can be seen that the share price of the company is trading above its 7,20, and 200 days moving average valued at A$0.175, A$0.171, and A$0.150 respectively. The 14-day Relative Strength Index (RSI) trading narrow at 60.889. Apart from the gain in value, the share action did not reveal any recognisable pattern on the daily chart.


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