Billions wiped from mining sector as gold, silver prices fall and copper, iron ore prices plummet to 2009 levels amid Chinese stock market collapse
The value of base and precious metal miners and the diversified giants all fell on Tuesday as commodity prices dropped to fresh multi-year lows hit by the triple whammy of a stronger dollar and turmoil in the eurozone and China.
In New York trade on Tuesday copper for delivery in September dropped as much as 6% to a low of $2.39 per pound or around $5,260 a tonne, the lowest since July 2009 and down 16% so far this year.
Despite a rebound in late trade, base metals prices ended the day at multi-year lows. Nickel lost as much 9% hitting $10,637 a tonne, tin ended 4.4% lower at $13,700 a tonne while zinc gave up 3.7% to $1,934 a tonne.
Lead prices dropped more than 2% to $1,722 a tonne entering a bear market with a 20% decline since its May high. The same fate befell aluminum which declined 1.7% to $1,666 a tonne, more than 20% below its September highs. Crude oil despite a slight gain late in the day is now back into bear territory.
Many of the 90m Chinese investors arrived at the rally late and used debt to finance share purchases, creating a dramatic knock-on effect on consumer confidence in the world’s second largest economy.
The price of iron ore continued its losing streak with the steelmaking raw material crashing through $50 a tonne to barely $3 above record lows hit in April. The Chinese import price for 62% iron content fines at the port of Tianjin fell 4.4% to $49.70 a tonne, after nine straight down days.
Forging almost as much steel as the rest of the world combined, China represents more than 70% of the seaborne trade in iron ore and imports roughly 40% – 50% of the world’s base metal production.
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