Chinese Economic Slowdown Sends Raw Materials Prices Lower
March 12th, 2014Via: Guardian:
Mining stocks have taken a hammering on world markets after the price of iron ore – Australia’s biggest export – posted the biggest one-day fall in over four years.
Figures showing an 18% fall in Chinese exports in February amplified fears of a slowdown in the world’s No. 2 economy, sending raw material prices plunging.
Iron ore for immediate delivery to China fell 8.3% to $104.70 a tonne, its largest one-day percentage fall in four and a half years, data compiled by The Steel Index shows.
Iron ore is a key ingredient in steelmaking and is the top revenue earner for Australia’s large mining concerns, BHP Billiton and Rio Tinto.
The spot price has fallen 22% this year and the companies took a battering during Monday’s trading sessions in Sydney and London as investors weighed the impact on their profitability.
The Australian listings fared a bit better on Tuesday. After a sharp fall in the morning, Rio was up 1.16% at $61.91 and BHP was down fractionally at $36.14.
The disappointing China trade data weighed on other commodities, including copper and oil, although China’s imports of most were up on the year. The weak exports suggested China’s commodity import demand could shrivel in coming months as end-users draw down swollen inventories.
