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Tesla agreement with Liontown spurs share price

The S&P/ASX 200 closed at the day's high on Wednesday, up 1.1%. US futures are dipping after markets there rallied overnight on easing geopolitical tensions between Russia and Ukraine. Oil and gold prices are heading lower as a result.

Locally, price penalties on lower quality iron ore hit Fortescue Metals Group earnings. The miner declared an interim dividend of 86c after announcing a $US2.8bn first-half profit, down 32% from a year ago. Revenue of $US813m for the half was down 13% on the first half of the previous financial year. Earnings before interest, tax, depreciation and amortisation fell 28% to $US4.76bn. Net debt by the end of December was at $US1.7bn.

Fortescue shipped a record 93.1 million tonnes of ore in the half, but its earnings were hit by steeper discounts applied to the lower grade ore it sells to steel mills, averaging $US96 a tonne in the first half of the financial year, only 70% of the benchmark price, which was above $US200 a tonne in May 2021, but has dropped to around $US140 a tonne currently. Shares fell 2%.

RBC's Craig Wong-Pan in a note to clients said that while CSL kept its full year NPAT guidance for constant currency growth of $2.15-$2.25bn, it now includes $90m-$110m of transaction costs, effectively a 5% upgrade to guidance. CSL’s net profit was 5% down at $US1.76bn in the half-year ending December 31. During the half year, the company opened 18 new plasma collection centres and plans to lift that number to 35 by the end of this financial year. Revenue firmed 4% to $US5.99bn and the bio-tech declared an interim dividend of $US1.04 a share to be paid on April 6. Shares were up 8.5%.

Liontown and Tesla have signed a legally binding sales and purchase term sheet for the supply of lithium spodumene concentrate from the new $473m Kathleen Valley Lithium Project in Western Australia. In a statement to the ASX, Liontown said the initial agreement is for five-years and is expected to commence in 2024. Shares gained as much as 18% through the day.

The Australian dollar is stronger against the US dollar, at US71.54c.

Spot gold is lower at $US1852.87 an ounce. WTI crude oil and Brent are down, at $US92.04 for WTI and $US93.17 a barrel for Brent.

Markets in Japan, Hong Kong, mainland China and Korea are all higher. The S&P/NZX 50 was up 1.5%.



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