Sector movers: Evraz, Ferrexpo lead surge in industrial mining sector

7th Sep 2012 16:25

Iron ore peers Evraz and Ferrexpo rocketed on Friday afternoon on hopes for the global economy after the bond-buying plan from the European Central Bank and increasing optimism that quantitative easing measures could be announced by the Federal Reserve next week.Average share prices in the industrial metals and mining sector have dropped by nearly a half over the past six months with concerns about infrastructure spending in China and worries about a global slowdown."The steel industry remains burdened with chronic structural overcapacity that could take seven to close to 20 years to eliminate," said analysts at Credit Suisse yesterday.The broker said that in nearly all regions - "from Australia to China, Europe to Japan, South Korea to Russia" - this overcapacity has forced domestic steel producers to seek additional volumes in the global export market."Pricing power remains cyclical and not structural as a consequence and returns could be muted for many years. But the performance of global steel equities over the past 24 months (down 39% relative to MSCI World up 13%) suggests the market is aware of this trend; thus we see a cyclical window of opportunity to own steels."Evraz was up around 15% before the close, while Ferrexpo had jumped over 19%. London Mining, Bellzone Mining and First Quantum Minerals were also performing well.Top performing sectors so far todayIndustrial Metals & Mining 2,670.33 +13.08%Personal Goods 20,980.85 +4.33%Mining 18,543.67 +4.01%Industrial Engineering 7,453.47 +2.49%Financial Services 5,142.82 +2.38%Bottom performing sectors so far todayBeverages 12,546.17 -3.25%Tobacco 35,558.92 -2.34%Pharmaceuticals & Biotechnology 9,685.96 -1.57%Food Producers & Processors 5,956.07 -1.56%Electricity 8,439.13 -0.98%