(Bloomberg) — Vedanta Resources Plc and Vale SA led declines in industrial-mining companies as Chinese investors returning from a public holiday drove iron ore to a seven-month low. Nickel traded near its lowest in a year after Indonesia’s largest producer started shipping ore to China.
An index of 18 producers tracked by Bloomberg Intelligence headed for a third straight loss, with Vedanta dropping 5.7 percent and Rio de Janeiro-based Vale sliding 5 percent. Earlier, a 6.5 percent slump took iron ore to 424.5 yuan ($62.3) a metric ton on the Dalian Commodity Exchange amid signs of ample supply. The September contract finished May down 19 percent, in the longest run of monthly declines since November 2015.
“The fundamentals in iron ore are relatively weak but the selloff is more to do with speculative traders’ positions,” Xiao Fu, an analyst at Bank of China International Global Commodities, said by email. “The bears are winning at the moment.”
Nickel, the worst performer on the London Metal Exchange this year, dropped as much as 3.2 percent to $8,825 a ton. It settled at $8,970 a ton at 5:51 p.m. in London.
PT Aneka Tambang confirmed it had started shipping low-grade nickel ore to China on the recommendation of Indonesia’s Energy and Mineral Resources Ministry, easing a supply crimp seen since the country’s government placed a ban on exports in 2014.
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