The ASX200 ended the day 0.44% higher at 8,127.7 after hitting a new all-time high of 8,148.7 in early trading. Tech stocks led the sector gains followed by energy and real estate.
Deutsche Bank (ETR:DBKGn): no rate move until 2Q25
Deutsche Bank Australia chief economist Phil Odonaghoe predicts the RBA’s next rate move will be a cut in 2Q25, after news that underlying inflation was "a lot softer than we expected" in the June quarter.
The statement is a turnaround from his previous call for the RBA to hike rates in August and follows ABS data revealing the 'trimmed mean' inflation, which the Reserve Bank focuses on, fell slightly in the June quarter from an annual rate of 4% to 3.9%.
"There are serious questions to be asked about the usefulness of the monthly CPI indicator, especially the extent to which analysts and the market can rely on the monthly trimmed mean estimate – it accelerated in Q2 just as the official quarterly print decelerated – that's the lesson for forecasters including us," Odonaghoe said.
Albemarle to cut lithium jobs
The slump in lithium prices has caused Australia's largest lithium producer and manufacturer, Albemarle, to shut half of its Kemerton lithium hydroxide conversion site in Western Australia and cease works to expand it. The decision was made as the company anticipates a charge of up to $1.7 billion due to a slowdown in the sector.
Unfortunately, the move is expected to result in the loss of around 300 Australian jobs as the company reacts to ongoing industry challenges.
The Kemerton plant, near Bunbury, produces technical and battery-grade lithium hydroxide for energy storage and industrial applications.
Albemarle has informed investors that it will cease construction activities at Train 3, idle production at Train 2 and place the unit under care and maintenance, while concentrating manufacturing efforts on the continued ramp and qualification of Train 1.
Albemarle said the measures were being taken to proactively address industry headwinds, particularly within the lithium value chain, to maintain long-term competitiveness.
Albemarle chairman and CEO Kent Masters said, “The long-term growth potential for our end markets remains strong, and we plan to leverage our core capabilities while ensuring we remain competitive.
“Given the dynamics of the global markets we serve, we must be able to pivot and pace as necessary to maintain our leading position.”
Albemarle reported a US$188 million net loss for the second quarter, which included an after-tax charge of US$215 million related to capital project asset write-offs and associated contract cancellation costs, primarily at Kemerton.
The decision also affects Monadelphous Group, who had its contracts at the Kemerton Project terminated, which had been estimated to generate revenue of $75 million to $85 million this financial year. MND shares lost 5% today.
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