Today was a down day for the S&P/ASX 200 (INDEXASX: ^AXJO) (ASX: XJO), which fell 0.44% to 5249 points.
Commodity producers were among the hardest hit, and here's why:
South32 Ltd (ASX: S32) lost 4% to $1.67 in what was generally a down day for commodity producers, possibly also representing some selling after a strong rise yesterday. Yesterday saw the release of South32's quarterly report, which revealed falling costs, and a net cash position – unlike many other miners – despite lower production. South32 shares currently trade at a discount to their Net Tangible Assets, although the business will remain exposed to movements in commodity prices.
South32 shares are down 18% in the past 12 months.
Shine Corporate Ltd (ASX: SHJ) fell 5% to $1.26 in what looks like a little profit taking after the company's 50% rise in the past 12 months. Shares have been hotly discussed on a number of internet forums and appear to be the target of a fair amount of short-term trading as investors attempt to revalue and profit from the company after the recent write-downs of its Work In Progress.
Shine Corporate shares are down 58% in the past 12 months.
Worleyparsons limited (ASX: WOR) dipped 5% to $6.72 after rising 19% in the past month. Some in the market believe the oil price could have bottomed, with WTI and Brent crude oils rising above US$40 per barrel in recent days. Investors are clearly expecting Worleyparsons to benefit from rising demand for oil services work, although caution is advised as this kind of demand does not immediately materialise when prices rise. At US$40/barrel, many global companies will likely continue to behave conservatively towards exploration.
Worleyparsons shares are down 39% in the past 12 months.
Sims Metal Management Ltd (ASX: SGM) slid 5% to $9.54 also after a very strong rise – up 44% in the past six months, thanks to rising iron ore prices. Rising iron ore prices and demand for steel tend to improve the recycler's margins, while lower ore and steel prices tend to squash them. Despite the recent rise in share prices, Sims recorded a heavy fall in revenues as well as a loss after tax in its most recent results, and the company's turnaround is far from complete. At today's prices, investors have a wide range of significantly better investments to pick from.
Sims shares are down 15% in the past 12 months.
