Fears that China’s slowdown will worsen, hurting demand in the biggest commodities consumer, have caused bloodletting in global mining stocks. A Bloomberg gauge of world mining shares has slumped 16 percent in 2016, more than twice as much as a measure of metals, leaving shares at the lowest compared with their product prices since at least 2003.
The Bloomberg World Mining Index of 80 stocks, including the world’s biggest miners BHP Billiton Ltd. and Rio Tinto Group, has lost 44 percent in the past 12 months, while a London Metal Exchange gauge of six metals from copper to aluminum has dropped 25 percent. “The sector looks cheap, and the valuations look compelling especially when you compare it against other sectors outside of commodities,” Paul Gait, an analyst at Sanford C. Bernstein Ltd., said by phone from London.
— With assistance by Martin Ritchie