Investors are concerned about slowing commodity demand from China and a potential global recession.
The post Why are ASX 200 mining shares having such a dire week? appeared first on The Motley Fool Australia. –
S&P/ASX 200 IndexÂ (ASX: XJO) mining shares have broadly underperformed the benchmark index this week.
The ASX 200 is up 1% since the opening bell on Monday.
The S&P/ASX 300 Metals & Mining Index (ASX: XMM), which includes some companies outside of ASX 200 mining shares, is down 4%.
And the pain has been felt across the sector, regardless of the metals the miners are most focused on.
Hereâs how some of the biggest ASX 200 mining shares by market cap have performed so far this week:
Rio Tinto LimitedÂ (ASX: RIO) share price is down 2.9%
BHP Group LimitedÂ (ASX: BHP) share price is down 4.7%
Fortescue Metals Group LimitedÂ (ASX: FMG) share price is down 4.9%
Mineral Resources LimitedÂ (ASX: MIN) share price is down 6.6%
Newcrest Mining Ltd (ASX: NCM) share price is down 5.0%
ASX 200 mining shares pressured by economic growth outlooks
Whether theyâre predominantly after iron ore, gold, copper, lithium or a range of other metals, ASX 200 mining shares have seen the price of those metals drop this week.
There are a number of factors at work here.
First, despite promises of more economic stimulus from the Chinese government, investors are concerned the Middle Kingdom wonât achieve its growth targets this year. As the worldâs top importer of iron ore, and chief market for Aussie exports, this has seen the price of the industrial metal slide this week, despite an overnight bump.
Increasing jitters about the likelihood of a recession in the United States is also putting pressure on base metal prices and by extension ASX 200 mining shares. Should the worldâs largest economy slip into a recession, the effects will likely be felt across much of the globe.
Copper prices this week were indicative of those recessionary fears.
You may have heard of copper referred to as âdoctor copperâ. Thatâs because copper is widely used in a range of construction and manufacturing activities. When the global economy is growing, demand for copper follows suit and prices rise. The same works in reverse.
And the copper price has slipped 7% since Monday, trading at its lowest level since February 2021.
The post Why are ASX 200 mining shares having such a dire week? appeared first on The Motley Fool Australia.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.