MGX, LCY, GRR: 3 ASX stocks in focus as India jacks up iron ore export duty

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MGX, LCY, GRR: 3 ASX stocks in focus as India jacks up iron ore export duty

Rising iron ore prices
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  • Iron ore prices rose earlier during the week as India increased export duties for iron ore and steel intermediates.
  • India accounted for nearly 3% of China’s total iron-ore imports in 2021.
  • Various ASX-listed iron ore miners have delivered notable YTD returns amid the robust rally in commodities prices.

Benchmark iron ore futures in China surged around 7% on Monday, recording the biggest intraday gain in the last two and half months. The staggering rise in the prices of iron ore was seen after India increased export duties on various commodities to limit the mounting inflationary pressures.

The third-largest economy of Asia increased export duties for iron ore and steel intermediates, jacking up excise duty on new iron ore and concentrates to 50% from 30%.

India is amongst the leading iron ore suppliers to China, accounting for nearly 3% of the country’s total imports in 2021.

On Monday, September delivery iron ore futures on the Dalian Commodity Exchange settled at CNY864 per tonne, up 4.4%, after logging an intraday high of 6.9% to exchange hands at CNY884 per tonne. Similarly, Iron Ore Fine China Import 62% iron last traded at US$133.99 per tonne on Tuesday, up 0.25% on the last close.

However, On Wednesday, the benchmark was trading at US$133.31 per tonne, down 0.51% on the last close.

Also Read: Why China’s GDP numbers are important for Aussie iron ore miners

Against this backdrop, let’s look at three ASX-listed iron ore miners that have delivered notable YTD returns.

ASX Iron Ore stocks

Mount Gibson Iron Limited

In the recent quarter ended 31 March 2022, Mount Gibson Iron Limited (ASX:MGX) sold 0.24 million wet metric tonnes of iron ore at an average grade of 62.8% Fe. MGX’s Group operating cash outflow landed at AU$38 million for the quarter. MGX held cash and investment reserves of AU$92 million, as of 31 March 2022.

The company does not hold any bank borrowings. Furthermore, it has an undrawn AU$100 million revolving credit facility.

Related read: Why is iron ore so important to the Australian economy?

Legacy Iron Ore Limited

In early May 2022, Western Australia-focused iron ore player Legacy Iron Ore Limited (ASX:LCY),  along with its partner Hawthorn Resources Limited, announced that the initial steps of the new Mt Bevan Iron Ore Joint Venture project have been taken with Hancock Magnetite Holdings Pty Ltd.

In addition to this, assays from all the drilling programs of Legacy Iron Ore at Yilgangi were compiled, and the Legacy database, along with the historical drilling database, was prepared during the March-ending quarter.

Related read: Why China’s GDP numbers are important for Aussie iron ore miners

Grange Resources Limited

In the March-ending quarter, Grange Resources Limited’s (ASX:GRR) concentrate production decreased, with 638kt produced relative to 666kt production for the December quarter. The company attributed the decline to annual scheduled maintenance.

Additionally, pellet sales for the quarter declined to 479kt compared with 647kt for the previous quarter.

Related read: Three ASX penny stocks defying gravity amid weak market  


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