Mining Stocks Drop as Economic and Political Malaise Dim Outlookby
First Quantum Minerals among biggest decliners as metals slump
Fears of a ‘Brexit’ and slower global growth add uncertainty
Industrial metals fell and mining companies headed for a third drop in four days on mounting demand concerns as investors assessed the outlook for global economic growth.
Investor worries mounted that the U.K. may vote to leave the European Union, while the yield on Germany’s 10-year government bund, Europe’s benchmark security, fell below zero for the first time on record. The Bloomberg Americas Mining Index slid as much as 3 percent, led by First Quantum Minerals Ltd. and Teck Resources Ltd.
“The base-metals complex is understandably broadly lower in the face of global economic and political disruptions,” Michael Turek, the head of base metals at BGC Partners Inc. in New York, said in an e-mail. These factors “add up to an unsettling mix.”
Zinc for delivery in three months declined the most among the six major metals traded on the London Metal Exchange, falling 2.8 percent to settle at $2,019 a metric ton at 5:51 p.m.
Aluminum was the only main LME metal to advance Tuesday, rising 0.6 percent. Six major Chinese aluminum producers agreed at a meeting Monday to jointly cut output if prices fall to 11,500 yuan ($1,743) a ton, Metal Bulletin reported, citing people familiar with the matter. Industry consultancy Shanghai Metals Market said there had been no agreement on output cuts at the meeting, citing unidentified people.
In other metals news:
- Copper, nickel, lead and tin also dropped in London.
- Stockpiles of copper tracked by the LME slipped a third day, falling 2.1 percent. Inventories jumped 37 percent last week, the most in a decade.
- Workers at South32 Ltd.’s Cerro Matoso ferro-nickel mine in Colombia were set to strike after talks failed to bring a breakthrough on Monday.
- Copper futures for July delivery fell 0.6 percent to $2.0405 a pound on the Comex in New York.