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Highlights
Trump-Xi call lifts early sentiment across iron ore and energy sectors on ASX 100
Lithium and rare earth stocks slide as trade tensions appear to cool
Tesla’s sharp decline and contract concerns ripple into critical mineral space
The ASX 100 opened with slight gains, supported by momentum in the mining and energy sectors, before turning negative in mid-session trading. Early optimism followed news of a phone call between Donald Trump and Xi Jinping, reviving discussions around China-US trade relations. Key mining companies including BHP Group Ltd (ASX:BHP) and Rio Tinto Ltd (ASX:RIO), both part of the ASX 100 index, responded with early strength as iron ore prices lifted on renewed hopes of export continuity.
Iron ore gains while critical minerals weaken
The Trump-Xi exchange was viewed as a signal that China may continue its demand for iron ore and crude supplies. This development supported resource stocks like Fortescue Ltd (ASX:FMG), also a member of the ASX 100. However, the shift in sentiment led to a decline in critical minerals companies. Pilbara Minerals Ltd (ASX:PLS) and IGO Ltd (ASX:IGO), both active in lithium and battery-related resources, dropped after sentiment cooled around immediate supply chain constraints in rare earths.
Tesla’s sharp fall adds weight on lithium stocks
The decline in lithium stocks was further influenced by a drop in Tesla’s market position, following comments from Trump regarding the termination of government contracts associated with the automaker. The remarks triggered a steep correction in Tesla's valuation, impacting sentiment toward upstream suppliers of battery materials such as lithium. The developments added downward pressure on domestic names such as Core Lithium Ltd (ASX:CXO), which operates within the critical minerals supply chain.
Energy sector remains supported by global developments
Energy names remained buoyant as Brent crude benchmarks responded positively to improved global trade dialogue. Santos Ltd (ASX:STO) and Woodside Energy Group Ltd (ASX:WDS), both constituents of the ASX 100, maintained early session gains driven by optimism surrounding crude demand outlooks. The broad-based support in the sector lifted overall energy segment performance on the index.
Worley announces LNG contract support work
Worley Ltd (ASX:WOR) confirmed a new agreement to provide engineering support for a liquefied natural gas pipeline project in Alaska, commissioned by Glenfarne. Although the contract marks a significant addition to its project portfolio, WOR shares held steady by midday. The company is also listed on the ASX 100 and remains a key player in global engineering services related to energy and resources.
Ora Banda signals output decline
Ora Banda Mining Ltd (ASX:OBM) revealed that its full-year production would fall short, citing unplanned downtime at its Davyhurst operation. The announcement prompted a retreat in its share price during morning trade, with the market reacting to operational disruptions affecting projected gold output.
SkyCity launches legal proceedings against Fletcher Building
SkyCity Entertainment Group Ltd (ASX:SKC) recorded a gain during the session after initiating a lawsuit seeking compensation from Fletcher Building Ltd (ASX:FBU) over issues relating to the construction of a major convention centre in New Zealand. The legal action alleges negligence in project delivery. Fletcher Building saw its stock move lower following the announcement. Neither company is listed on the ASX 100, but both feature actively on broader market indices.
