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Miners fall despite iron ore price hike

With investors remaining cautious regarding China’s growth prospects, many of Australia’s largest miners fell in value yesterday whilst Rio Tinto (ASX: RIO) and BHP Billiton (ASX: BHP) remained flat.

After seeing gains last week as the price of iron ore and other commodities climbed amongst restocking of Chinese inventories, iron ore miners Fortescue Metals Group (ASX: FMG) fell in value by 1.13% to $3.50 per share, whilst Arrium (ASX: ARI) dropped 1.66%. These falls occurred despite the fact that the commodity had climbed to its highest level since May overnight to US$126.80 per tonne.

Although doubt lingers over Chinese growth prospects, there is a positive for shareholders of large-cap miners. Peter Argyrides, a BBY senior institutional advisor, maintains a positive outlook on some of Australia’s largest miners following their recent gains, cheap valuations and strong balance sheets. BHP and Rio Tinto have both been focused on divesting in non-core assets and strengthening their balance sheets since the inductions of their respective new CEOs earlier this year.

Last week, BHP climbed 5.4% and Rio Tinto saw a gain of 3.9%.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

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