JOHANNESBURG (miningweekly.com) – The Deloitte Western Australia (WA) Index has showed a fourth consecutive monthly loss, with the market capitalisation of Western Australia-listed companies falling 5.7% during June, closing the month at A$125.6-billion.

June marked a sombre finale to a year dominated by losses, with Western Australia-listed companies struggling through a period of falling commodity prices, a stubbornly high Australian dollar and increasing operational costs in Australia. Over the 12 months to June 30, the Deloitte WA Index fell 10.9%.

“The Western Australia economy has faced many challenges during the year, and given the rapid fall in commodity prices in recent months, these challenges are likely to continue in the near term.

“Companies are looking at a shift in strategy, with a focus on cost reduction and navigating through increasing regulatory burdens; at the same time profit margins are diminishing as commodity prices fall. Remaining competitive on an international level is important for the Western Australia economy to stay in the game,” Deloitte Perth audit partner Tim Richards said.

Global markets also did not fare well, with all international indices surveyed down in the month under review. Growing concerns around China’s economic stability combined with US Federal Reserve chairperson Ben Bernanke’s comments regarding a potential scale back of the US government’s quantitative easing policies hit stocks hard.

The FTSE 100 was the hardest hit, with a fall of 5.8%, while the ASX All Ordinaries and US S&P 500 were not far behind, falling 2.8% and 2.6% respectively. Meanwhile, the Nikkei has ended the growth run experienced at the start of the year, falling 0.7% in the month of June.

Deloitte said exporters have welcomed a falling Australian dollar, which declined to as low as $0.92 during June, its lowest level since September 2010.

However, a weakening local currency was not sufficient to outweigh falling commodity prices, with the majority of commodities surveyed experiencing significant price falls during June, in Australian dollar and US dollar terms.

Precious metals suffered the greatest fall of commodities surveyed, with silver, palladium and gold experiencing double-digit falls of 16.4%, 13.6% and 12.7% respectively. Gold and silver were impacted on by the perceived overreaction to the news that the US Federal Reserve would begin to withdraw stimulus.

Base metals tumbled on the back of weak manufacturing data coming out of China, with a report from HSBC indicating that manufacturing activity had slumped to a nine-month low, combined with rising inventory levels and reports of a slowdown of China’s house price gains for a second consecutive month in May.

Iron-ore and brent crude oil prices bucked the trend, with price rises of 4.4% and 1.9%, respectively.

The ‘movers and shakers’ for the month of June included Antares Energy, Coalspur Mines and Focus Minerals, with increases in market capitalisation of 37.9%, 19.0% and 16.7% respectively.