Glencore Drops a 2nd Day as China Slowdown Weighs on Minersby
Chinese imports fall in longest losing streak in six years
FTSE mining index extends retreat from eight-week high
Glencore Plc declined for a second day as mining companies extended a retreat from an eight-week high after a bigger-than-estimated drop in China’s imports underscored the economic slowed in the world’s largest consumer of commodities.
Glencore, the miner and trader that on Monday said it’s seeking to sell two copper mines in Australia and Chile, fell 2.6 percent by the close in London. It was one of the biggest decliners in the 13-member FTSE 350 Mining Index, which slipped 1.2 percent.
China’s imports slumped for an 11th month, extending the longest losing streak in six years, customs data showed Tuesday. The nation’s slowing demand for commodities has broadsided the world’s biggest metal producers and trading houses, who have been forced to cut output, reduce costs and restrict future investment.
“There are very little or no signs that the Chinese economy is consuming more,” Naeem Aslam, chief market analyst at Avatrade Ltd. in Dublin, said in an e-mailed note. The “mining sector today once again could see more selling pressure,” he said.
The Chinese import slide reflects this year’s plunge in commodity prices and tepid domestic demand as the country shifts away from low-end manufacturing and debt-fueled investment. Most industrial metals fell on the London Metal Exchange, with copper retreating 0.8 percent, the first decline in three days.
Glencore, this year’s worst performer on the U.K.’s benchmark stock index, has responded to slumping demand by shuttering production of zinc, copper and coal and selling assets to cut debt. Kynikos Associates LP founder Jim Chanos, who hinted at a short position in the company, said Monday that the company bought assets at at the top of the market and is now selling at the bottom.
Glencore shares, which reached an all-time low on Sept. 28 when they plunged by a record 29 percent, as much as doubled through Friday after the company refuted investor concerns about its ability to repay debt.
Anglo American Plc fell 1.8 percent, while BHP Billiton Ltd., the biggest miner, declined 1.3 percent.