South32 Limited’s [ASX:S32] share price has risen 2.93% after quite the recent slump.
South32 split from BHP Billiton 3 years ago.
Operating not only in Australia, but also in parts of South America and South Africa.
Why and how the rise?
Earlier this week, we saw one of the largest drops in aluminium prices in eight years.
Tuesday’s ASX record of South32’s saw a significant drop as a result of that.
However today, aluminium has stopped falling, and stayed stable — it could continue sideways from here.
So it’s possible that with aluminium no longer falling, investors may view South32’s commodities like aluminium and manganese as being oversold, which could have led to today’s share price bounce.
Where to next for South32?
South32 isn’t without problems though. It’s been mired in controversy for years.
Issues such as environmental health allegations from Colombia and its constitutional court to prior mining and ‘black ownership requirements’ concerns in South Africa.
There’s also the ‘long-term cultural issue’ stint with union workers in Illawarra that’s caused issues too — so then why and how has South32 been able to ‘rise-above’ despite all these problems?
However, as The Australian Financial Review puts it:
‘This is a company with an eclectic collection of assets located in some difficult areas of the world’, and, ‘Just because BHP didn’t want those assets doesn’t mean they are not valuable.’
So future share prices are likely to be driven by commodity pricing and how these are handled.
For Money Morning
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