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The ASX slipped 0.3% on Wednesday, dragged down by banking stocks. In contrast, the mining sector received a boost from lithium stocks, following reports that Chinese EV battery maker CATL may have suspended operations at two lepidolite mines. This potential cut in production could reduce China's lithium carbonate output by 8%. CATL, a global leader in lithium-ion batteries for electric vehicles and energy storage systems, has previously been rumored to reduce lithium production, but UBS analyst Sky Han expressed more confidence in the accuracy of the reports this time.
Lithium stocks reacted strongly to the news, with Pilbara Minerals (ASX:PLS) and Liontown Resources (ASX:LTR) both jumping 15%. Mineral Resources (ASX:MIN) also saw a significant increase, rising 17%, after receiving approval from the Foreign Investment Review Board for the sale of a 49% stake in its Onslow Iron haul road to Morgan Stanley Infrastructure Partners. The deal, valued at $1.3 billion, will provide $1.1 billion in upfront cash, with an additional $200 million contingent on meeting future production targets.
In the gold sector, Newmont (ASX:NMT) announced plans to sell its majority interest in the Telfer mine in Western Australia, along with other assets, to UK-based Greatland Gold. This move is part of Newmont’s $2 billion non-core asset divestiture strategy.
Meanwhile, energy stocks were hit hard as Brent crude futures dropped by 3% to fall below $70 a barrel for the first time in over two years. This decline followed OPEC’s decision to lower its oil demand forecast for 2024 and 2025, raising concerns of an oversupply. Additionally, there is growing unease over the slowing US economy and China’s struggling recovery.
Bitcoin also faced a slight decline, dropping 1% to $56,475 during the US presidential debate between Donald Trump and Kamala Harris. The debate saw Harris sharply criticize Trump, who responded with repeated, debunked claims. The debate could influence market sectors, with Trump’s focus on tax cuts and support for oil potentially benefiting energy sectors, while Harris’s commitment to green energy could boost renewable industries.
In Asia, markets experienced declines, particularly in Japan and Hong Kong, as traders awaited a US inflation report. The yen strengthened following hints of potential rate hikes from the Bank of Japan. Oil prices remained steady below $70, and US stock futures dipped as traders looked ahead to further economic data.
