PLS ASX: Lithium, uranium stocks rally as investors turn bullish on commodities

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Australian miners are on track for their best week so far this year as investors rush back to the beaten-up sector in hopes the commodities comeback is just beginning.

Already a subscriber?The army of short sellers targeting Australian miners are licking their wounds after a brutal reversal in commodity markets this week sent traders scrambling to reposition for a rally in resources stocks.

“The fuel was on the floor for the commodity trade with heavily shorted equities and a seasonally strong period for restocking approaching,” said Tribeca portfolio manager Ben Cleary. “Markets just needed a match and that came in the form of supply shocks from China to Russia, reducing Western world supply of lithium, uranium, and other metals.

That was in contrast to advice from broker UBS, which told clients to stick with banks over miners due to China’s ongoing property crisis. The S&P/ASX 200 Resources Index rose 4.3 per cent this week, while the corresponding bank index dropped 1.2 per cent.lithium prices would climb up to 25 per cent over the next three monthsEven iron ore, which has tanked more than 30 per cent this year, is showing signs of life as low prices force higher-cost producers to shut their operations.

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