South32 Ltd (ASX: S32), IGO Ltd (ASX: IGO), and Nickel Mines Ltd (ASX: NIC) share prices are all crashing today.
At the time of writing, South32's share price is $2.835, down 1.9%. IGO's share price is currently trading at $6.26, down 3.9%. And Nickel Mines comes in at $1.25, down $4.60. These falls are greater than the S&P/ASX All Ordinaries Index lag of 1.14%.
Nickel Mines has made a slight recovery this afternoon as the company announced it may enter the electric vehicle battery market. Its current share price is $1.265.
Let's take a closer look at why these ASX mining companies are all tumbling today.
Image source: Getty Images
ASX mining shares rise and fall with commodity prices
As previously reported, the share price of ASX mining companies rises and falls with fluctuations in the commodities market. Today nickel enters the spotlight as its price takes a turn for the worse.
Currently, nickel is trading at US$16,088.50 a tonne. Yesterday, the metal was selling at approximately US$17,370 and last week it swapped hands for around US$19,160. A fall of more than US$3,000 (16%) in the space of a week!
In fact, nickel is one of the few minerals that is priced lower now (10% down) than this time last year.
The Australian Financial Review (AFR) reports that the price of nickel is sliding, and will continue to fall, as the nickel supply increases.
In economic theory – as supply increases, the price will decrease. This does not bode well for investors in nickel extraction companies.
South32's share price is not falling as steeply as the other 2 ASX mining companies, possibly because it is not as reliant on nickel as IGO and Nickel Mines.
Share price snapshots
While South32's share price is down today, it's coming off a 52-week high of $2.90 from yesterday. In fact, if you had bought shares in the company during the COVID-19 market rout in March last year, you would be looking at a 70.7% return on investment.
IGO share price is much the same. While it has been falling since hitting its 52-week high at the beginning of 2021, its share price is 92% higher than at the end of March last year.
Nickel Mines is no exception to the trend. The company did hit its 52-week high 2 weeks ago. Even still, if an investor bought shares in the company at its low of 29 cents (again, at the height of COVID), they would be sitting on a whopping a 320.7% uplift.
The market capitalisations of South32, IGO, and Nickel Mines are $13.6 billion, $4.7 billion, and $3.1 billion respectively.
