Australian resources stocks are experiencing a surge, driven by higher-than-expected commodity prices. Eighteen of the top 200 companies recently traded at 12-month highs, with nearly all being miners or mining services providers, including BHP, Mineral Resources, South32, and Orica. This rally is attributed to commodity prices trading higher than analysts’ long-term forecasts, boosting earnings potential for these companies.
Spot prices for major commodities like iron ore, copper, gold, nickel, and coking coal are exceeding forecasts for 2026, 2027, and even 2028. This discrepancy translates to potentially stronger earnings, cash flows, and capital market opportunities for miners like BHP and Fortescue. Investors are reacting to upgraded earnings forecasts, creating a snowball effect that is rapidly increasing share prices.
The ASX materials index has risen almost 40 per cent in the past six months, with a quarter of these gains occurring in the last two weeks. As money rotates out of sectors like technology, healthcare, and banks, miners are becoming increasingly attractive. However, analysts have been slow to adjust to the speed and breadth of the commodity price increases, particularly in gold, silver, copper, and lithium.
This trend presents both opportunities and challenges for fund managers who may be underweight in gold stocks, even as these shares see significant gains. As commodity prices continue to climb, fuelled by factors such as tech investment, electrification, and geopolitical uncertainties, miners are positioned to benefit from increased earnings and investor interest. BHP is a leading global resources company, focused on discovering, acquiring, developing, and marketing natural resources. Rio Tinto operates mines, smelters, and refineries all around the world.
