The Day Ahead
The primary focus for markets today is the volatility surrounding the Strait of Hormuz. With Iran walking out of peace talks following threats from Donald Trump and subsequently closing the strait, expect oil prices to spike and the ASX to open under pressure. This geopolitical instability is the dominant narrative, overriding domestic sentiment.
Keep a close eye on the energy sector, specifically gas. The debate over the Australian government's proposed 20% domestic gas reservation policy is intensifying. With critics warning of sovereign risk and investment flight, any further government rhetoric on this will move the needle for LNG players.
Finally, watch for continued fallout from the WiseTech Global governance crisis. With HESTA and other major investors demanding transparency regarding Richard White’s AFP probe, the stock remains a high-volatility play. The market is now weighing whether the company's operational moat can survive a forced leadership transition.
Yesterday's Key Stories
Energy & Gas
- Gas Policy: The Australian government's proposed 20% LNG domestic reservation mandate is facing fierce opposition from companies like Santos and JERA, who argue it creates sovereign risk and undermines new investment.
- Carbon Credits: Shell's Prelude LNG facility earned over $90 million in carbon credits under the Safeguard Mechanism despite increasing total emissions, sparking criticism over policy loopholes.
- Queensland Energy: The Queensland government will allocate $5 billion to upgrade coal-fired power stations and transmission lines, including the CopperString and Gladstone projects.
- Industrial Action: The Australian Workers’ Union has filed for protected action for catering staff at Woodside’s offshore platforms over wage and allowance disputes.
Mining & Metals
- Copper: South Australia recorded record copper exports of $5.2 billion through April 2026, driven by demand from India; BHP has invested $840 million to modernise Olympic Dam.
- Iron Ore: Hancock Iron Ore is deploying proprietary AI (RoyBot) and computer vision tools to optimise process plants and predictive maintenance.
- Niobium & Base Metals: WA1 Resources reported positive beneficiation results for the Luni niobium project, while Terra Metals confirmed a high-grade copper-nickel-cobalt system at its Dante project.
- M&A: Aeris Resources received court approval to acquire Peel Mining, adding the South Cobar Copper Project to its portfolio.
- Rare Earths: China has added several US rare earth and aerospace firms to its export control list, following G7 efforts to reduce reliance on Chinese imports.
Macro, Policy & Finance
- Taxation: The Actuaries Institute reports a growing intergenerational equity gap, with the tax system favouring older Australians via superannuation and capital gains settings.
- Infrastructure: The Victorian government is facing criticism for subsidising the sourcing of native timber from Tasmania following Victoria's own logging ban.
- Corporate Governance: Mineral Resources appointed Darren Killeen as COO as part of a succession plan for founder Chris Ellison amid ongoing ASIC and ATO investigations.
- Investment Trends: Regal Partners' new small-cap manager, Jackson Aldridge, has identified Lindian Resources (rare earths) and Forrestania Resources (gold) as high-conviction bets.