The S&P/All Ordinaries (Index: ^AORD) (ASX: XAO) has slipped down 0.9% in late afternoon trading, and is flat for the week, despite all the volatility.
After opening higher at the start of trading, the index has been on the slippery slide since around 11AM. And while the index is down less than 1%, these four stocks have been taken out the back by investors and given a good hiding…
Mount Gibson Iron Limited (ASX: MGX) has dropped 48% to 21.5 cents, after the miner announced that its Koolan iron ore mine is virtually on care and maintenance and has ceased production. Most workers at the site have been made redundant, while the company assesses the potential reopen of the mine. The main issue is the collapse of a sea wall into the mine's main pit, and fixing it may cost more than the mine is worth. The future looks highly uncertain.
Liquefied Natural Gas Ltd (ASX: LNG) has seen its shares slump 14.4% to $2.67. The share price of the aspiring LNG producer has been very volatile in recent weeks, mainly impacted by the huge fall in oil prices. As you can see from the chart below, oil prices have dropped by 38% since June.
Source: Forbes
LNG prices are usually linked to oil prices, but the additional issue LNGL faces, is that shale gas production in the US is likely to be higher cost – and potentially uneconomical at these prices. That could mean issues sourcing gas for its proposed LNG plant. Like Mount Gibson above, the future for LNGL looks less certain that it did.
Sundance Energy Australia Ltd (ASX: SEA) shares have dropped 11.5% to around 56 cents. The oil and gas producer is mainly focused on US shale petroleum production, and the market obviously sees Sundance as one of those higher cost producers that many become unprofitable at current low oil prices.
BC Iron Limited (ASX: BCI) shares have slipped 7.9% to 46.5 cents today, and 91% since the beginning of the year, as the iron ore price slumped. As one of the higher cost Australian iron ore producers, BC Iron is reported to be unprofitable at the current iron ore price of around US$71 per tonne. Already the company has taken a number of measures to slash costs, but will it be enough?
