November 24, 2015 – Australian miners led losses in Asian commodity firms today, with giant BHP Billiton sitting at a 10-year low, as metals prices slip further on slack demand and a strong dollar.
Traders tracked losses in New York and Europe as concerns about the global economy returned, particularly the sharp growth slowdown in China, a crucial buyer of commodities.
Producers took a hit as the price of copper sank to a six-year low below US$4,500 a tonne yesterday, nickel was at its lowest for more than a decade, and zinc and silver declined.
Oil prices saw a pick-up after Saudi Arabia said it was prepared to work with other producers to stabilise prices, although dealers remain subdued owing to a long-running supply glut, continued overproduction and anaemic demand.
“Wild gyrations in oil and another copper tumble could see further pressure on resource stocks,” Michael McCarthy, chief markets strategist in Sydney at CMC Markets, said.
BHP, the world’s biggest miner, fell 1.8 per cent and rival Rio Tinto lost 1.5 per cent, while Fortescue Metals was off more than three per cent.
Hong Kong-listed Jiangxi Copper shed 1.4 per cent and Aluminium Corp of China was 1.6 per cent off.
In Shanghai mining and processing firm Shanghai U9 Game tumbled by its 10 per cent daily limit.
Weakness in commodity prices weighed on Wall Street on Monday, where all three main indexes ended in the red, while London, Paris and Frankfurt were also lower.
In Asia today, Sydney shed one per cent and Hong Kong ended off 0.35 per cent, but Tokyo enjoyed a late rally to close slightly higher.
Traders in Shanghai were spooked after China’s securities regulator said Monday it would restart initial public offerings next week in the city as well as in Shenzhen.
The China Securities Regulatory Commission froze IPOs in July as part of efforts to staunch a market rout that saw a 40 per cent plunge in prices and wiped trillions of dollars off valuations.
The market has stabilised since August, rising more than 20 per cent. But investors fear the arrival of new firms will divert cash from existing listings and lead to another round of volatility.
Shanghai ended 0.16 per cent higher on Tuesday, with bargain-hunting fuelling a late rally after the market spent most of the day in negative territory.
Regional traders are awaiting the release of fresh US data, including on economic growth, before an expected Federal Reserve interest rate rise next month.
A series of figures from Washington in recent months has led the bank’s policymakers to support a small increase in borrowing costs for the first time in almost a decade, sending the dollar rallying against its major peers.
However, it was lower against most emerging-market units as dealers bet that any increase would be small and gradual.
The Malaysian ringgit jumped more than one per cent thanks to a rise in the price of oil, a key export for the country, while the South Korean won pushed 0.4 per cent higher. The Indonesian rupiah, Australian dollar and Taiwan dollar were each up about 0.2 per cent.