Big day for miners
Earthmoving demand pushes Caterpillar share price to highest level in five years.
Wednesday 26 July 2017
Mining companies have had a huge day on the stock market today as confidence in a sustained recovery in global mining continues to build.
Among the data impressing investors is a resurgent copper price, and good results from large mining equipment suppliers like Caterpillar.
Yesterday CAT reported revenues had increased 10% in the last three months as Chinese demand for machinery picked up as the government spent on infrastructure projects, pushing CAT's share price to their highest level since 2012.
Analysts sometimes refer to copper as Dr Copper because it can diagnose how well the world economy is feeling.
In theory, if demand for copper is good, most other commodities will follow the same trajectory - particularly those required for construction like coking coal.
Copper prices for July delivery were up 4.1 per cent to $US2.8405 a pound overnight - a level not seen since 2015, and this calendar year copper prices have improved 14%.
Australian mining stocks surged on the news today. BHP Billiton and Rio Tinto were both up 3 per cent, while OZ Minerals rose almost 8 per cent and Sandfire Resources was up 7 per cent.