Image source: Shutterstock

Highlights:

  • Mining sub-index tracks steepest intraday percentage gain since April 29
  • Iron ore prices near five-week high amid tentative Sino-U.S. trade stabilization
  • Rio Tinto (ASX:RIO) and BHP Group (ASX:BHP) post modest gains during session

Australian mining shares advanced on Thursday, with the S&P/ASX 200 Metals & Mining Index (.AXMM) rising 1.6% to 5,496 points, its highest closing level since March 28. The sector also marked its steepest intraday percentage gain in over two weeks, supported by iron ore prices holding firm near a five-week high.

The gains follow renewed optimism around global trade, after signs of a potential easing in tensions between China and the United States. Market participants cited this as a supportive factor for iron ore demand, though the momentum was tempered by weaker credit data out of China, which raised concerns about the country’s near-term economic activity.

Iron ore futures remained relatively stable in Thursday’s session, trading near recent highs as traders digested mixed signals from the world’s largest steel consumer. While China’s demand outlook showed short-term improvement, underwhelming credit growth limited further upside for commodity prices.

Among major miners, Rio Tinto Ltd (ASX:RIO) climbed 0.9%, while BHP Group Ltd (ASX:BHP) added 0.8%, contributing to the broader index's upward move. Smaller mining stocks also saw scattered gains, in line with the rise in commodity sentiment.

Despite Thursday's rally, the mining sub-index remains up only 2.9% year-to-date, underperforming other resource-linked sectors amid global economic uncertainty and fluctuating commodity trends.

Market attention will continue to focus on developments in China’s economic policy, infrastructure activity, and further clarity on international trade dynamics. These factors remain central to demand expectations for key Australian exports like iron ore, coal, and base metals.

Investors are also watching for upcoming earnings results and production updates from major miners, which could influence future movements in the index and provide insight into the sector’s response to commodity price shifts.