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Why did the stock price of Korab Resources (ASX: KOR) rise 178% today?

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NS Collab Resource Limited (ASX: KOR) With Tuesday’s session up 177.78%, there was little room for stocks in today’s trading.

Colap’s stock was moving today, despite the lack of key price-sensitive information from the company’s camp.

However, there seemed to be a fundamental force working to help explain the surge in trading in Korap stocks on Tuesday.

What fuels Korab Resources’ stock price today?

In the absence of price-sensitive information, you need to look at the underlying commodity markets that Colap sells in order to decipher what is behind today’s profits.

The price of magnesium, the leading alloy used in the metal manufacturing industry, has risen by more than 200% year-to-date.

Since then, it has cooled down when I left September, but not before it exceeded 130% during the month.

As a result, magnesium fell from a record high of $ 14,857.65 / ton on September 23 and is currently trading at $ 9,853 / ton.

What caused the price of magnesium to rise significantly?

It is all summarized in recent government policies from China in efforts to curb power generation and harmful emissions.

In Shaanxi and Shanxi, which are considered to be the world’s leading magnesium hubs, 25 factories were closed this year, while the remaining facilities reduced production by 50% in line with this policy.

In Europe, where 95% of magnesium is purchased from China, magnesium is expected to run out of stock by the end of November. According to trade economics.

What does this mean for Colap?

That’s why we’re back at Korab Resources. Mining companies have previously stated in several earnings reports that they are working on the development of a “Winchester Magnesium Deposit” near Darwin, Northern Territory.

according to For today’s announcement“The Winchester deposit is suitable for low-cost open pit mining using the blast and excavator method and has the high quality magnesium mineral resources reported according to the JORC Code,” said Kolab.

The company is discussing supply from Winchester deposits with magnesium metal users and buyers, including automakers Fiat and Daimler.

There is no consensus, and it is categorically asserted that all discussions are “early and incomplete … the details of these discussions are premature and speculative.”

Given the urgency of magnesium users to replenish their stockpiles and the set scene built from Kolab’s speculative Winchester deposits, a picture of why investors are bidding on their stock today is beginning to form. ..

As a result of these rises, Korab Resources’ share price has skyrocketed by more than 500% year-to-date and rose 260% last week.

Why did the stock price of Korab Resources (ASX: KOR) rise 178% today?

Source link Why did the stock price of Korab Resources (ASX: KOR) rise 178% today?

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