Jarden downgrade sends Champion Iron shares lower
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The news: Champion Iron shares lost ground on the ASX after Jarden downgraded the iron ore miner, as forest fires in the September quarter interrupted operations at its Bloom Lake mine in Quebec.
The numbers: Champion Iron shares were down 5.1% to $6.63 by 1:55pm AEST, making it the worst performing company across the ASX 200.
Materials, down 1.51%, was the worst performing sector on the ASX as fellow iron mining majors Fortescue (-2.4%), Rio Tinto (-2.3%) and BHP (-2.1%) traded lower.
Jarden downgraded Champion Iron from 'buy' to 'overweight' and slashed its target price 7.5% from $7.47 to $6.91.
Jarden forecasts price realisation for concentrate from Bloom Lake of USD120.8 ($176.37) per dry metric tonne, compared to an average of USD126.1 in the June quarter.
The context: Jarden analysts said that while production and sales have shown steady increases since the completion of a second concentrator at Champion Iron's Bloom Lake mine, they noted that inventories have continued to build at the site following forest fires in July and increased freight costs.
The wider sell-off in mining stocks reversed some of last week's rally, after China's central bank announced a number of growth measures aimed at supporting the property sector, triggering a rise in iron ore prices.
The source: Jarden research
