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Why is the Hawsons Iron share price rocketing 18% on Monday?

The global steel industry is facing increasing pressures to decarbonise production.

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Bernd Struben
Bernd Struben earned his BA in economics from the University of Michigan in 1991, with post-graduate studies in environmental economics at the University of Connecticut. Over the years he’s written about and analysed the tourism industry in the Caribbean; Europe’s commercial real estate markets; and, since moving to Australia in 2010, global and Aussie share markets. Bernd studies geopolitical and macroeconomic trends, alongside sector and company specific data, to gauge what he believes could be tomorrow's best investments. In his free time, you might find Bernd at the beach with his family or working on his next science fiction novel.
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Key points
  • The Hawsons Iron share price is rocketing 18% to start the week
  • The company reported on 18 non-binding Letters of Intent for the offtake of up to 58 million tonnes per annum (Mtpa) of its ‘green steel’
  • The miner indicated that there’s plenty of demand to scale up its Hawsons Iron Project

The Hawsons Iron Ltd (ASX: HIO) share price is on a tear on Monday, up 18.28% in morning trade.

The ASX iron ore stock closed on Friday trading for 9.3 cents per share and is currently changing hands for 11 cents per share.

Here's what driving ASX investor interest today.

a miner holds his thumb up as he holds a device in his other hand.

Image source: Getty Images

What are ASX investors considering?

The Hawsons Iron share price is rocketing following a non-price sensitive release announcing non-binding Letters of Intent (LOIs).

The LOIs are for the offtake of up to 58 million tonnes per annum (Mtpa) of high-grade Hawsons Supergrade concentrate. The miner said this reflects increasing pressure on the global steel industry to decarbonise production.

The current list of 18 potential off-takers include 12 steel mill operators and six commodity trading houses.

The Hawsons Iron share price may also be getting a lift from the report on demand from mining companies for offtake discussions once a Bankable Feasibility Study (BFS) is complete.

Commenting on the progress, Hawsons' managing director, Bryan Granzien said:

This level of investment interest in the project and robust offtake demand is clearly a strong demonstration that making the transition to producing zero-emission 'Green Steel' is front and centre on the global steel industry's planning horizon and that Australia is a preferred supplier of high-grade magnetite concentrate.

The miner indicated that there's plenty of demand to scale up its Iron Project.

"The LOIs we now have in hand provide additional confidence that there is more than sufficient market demand to support a modular expansion plan to 20 Mtpa," Granzien said.

Hawsons said it couldn't name the interested parties at this time due to commercial-in-confidence considerations.

Hawsons Iron share price snapshot

The Hawsons Iron share price notched up fresh five years highs in April this year but has since retraced. With today's big intraday boost factored in, the ASX iron ore miner is trading right where it was 12 months ago.

The All Ordinaries Index (ASX: XAO) is also flat over the full year.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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