WA Index slumps 6.9pc in Sept
A plunging iron ore price drove a 6.9 per cent slump in the Deloitte WA Index of ASX-listed stocks in September.
Falls in other commodity prices, with the exception of uranium and silver, also took their toll on the index, which is heavily weighted towards the resources sector.
The 6.9 per cent slump on the local index was more than one per cent worse than the All Ordinaries slide of 5.8 per cent for the month.
The iron ore price decreased by 11.8 per cent during September, to close at $US78.50 per tonne - a new five-year low.
The iron ore price has remained under pressure because of concerns about the Chinese economy, with weakness in the Chinese property market and steel sector, combined with increased supply driven by the majors, BHP Billiton, Rio Tinto and Vale.
Fortescue Metals Group, the biggest iron ore producer on the WA Index and a significant constituent of it, experienced a 17 per cent decrease in its market capitalisation over the period.
Deloitte WA clients and markets partner Tim Richards said the continued decrease in the ore price was placing significant pressure on producers at both ends of the market.
"Major producers are looking to increase production as a result of the significant investments in expansion projects, however this is putting continued pressure on prices as a result of demand concerns, resulting in many smaller projects being marginal at best," he said.
Uranium maintained its position as the best commodity performer, increasing 17.7 per cent in September, driven by disruption to global supplies caused by US and EU sanctions against Russia, a major uranium supplier, because of its ongoing conflict with Ukraine.
On the demand side, Japan's plan to restart its nuclear program and China's ongoing nuclear plant construction program to cut pollution, has put upward pressure on prices.
Movers for the month included Newfield Resources (up 54.2 per cent), Northern Minerals (up 27 per cent) and Focus Minerals (up 23.8 per cent).
