Miners tumble as Citigroup sees bigger commodity losses

BEIJING: Miners from Australia to China led a selloff in resources shares after metals prices slumped and Citigroup warned the worst commodity meltdown since 2008 may have further to run.

The Bloomberg Asia Pacific Mining Index of the biggest companies in the region tumbled the most in almost a month as BHP Billiton and its spinoff South32 slid more than 3 per cent. Chinese metals producers including Jiangxi Copper and Aluminum Corp of China declined as Glencore’s stock in Hong Kong followed its London shares to a record low.

Returns from raw materials are languishing near the weakest in 16 years amid rising inventories just as demand growth slows in China, the world’s biggest consumer of everything from cotton to zinc. Money has been flowing out of funds linked to metals, crops and energy, while investors have punished shares of miners and oil drillers.

"Slowing growth in China, the world’s largest consumer of commodities, is the biggest contributing factor for slumping prices," Will Yun, a commodities analyst at Hyundai Futures in Seoul, said. "Unless China comes up with more definite policies to stimulate the economy, bearish prices will most likely continue."

Copper led a slide in industrial metals on the London Metals Exchange on Tuesday, dropping the most since July, while zinc fell to the weakest in more than five years.