Kumba, Anglo, Lonmin shredded as worries grow

[miningmx.com] – SHARES in Kumba Iron Ore were 6.54% lower in Johannesburg yesterday taking the Anglo American listed subsidiary’s losses to nearly 22% in a week and 50% lower this year.

In an article by Bloomberg News, which was republished in BDLive, Bernstein analyst Paul Gait said that momentum in the price of iron ore was “clearly negative” and would be “hard to reverse in the immediate short-term”.

Kumba’s position as a niche iron ore producer was also vulnerable, he said. “The revealed preference of the miners is for volume over value, tonnes ahead of price,” Gait told Bloomberg News.

The price of iron ore has fallen to below $50 per tonne and some analysts felt it could head even lower. “If this continues, we think iron ore can continue going lower,” Jeremy Sussman, a mining analyst at Clarksons said.

Other major mining stocks on the Johannesburg Stock Exchange were also shredded, largely owing to worries about the rate of growth in China with copper prices falling to a five-month low on concern about economic growth in China.

Glencore was the biggest loser in Johannesburg down nearly 7% whilst Anglo American and Lonmin were 5.6% and 6.4% weaker respectively.

“While Greece remains in focus, the volatility in Chinese stock markets has continued, impacting on commodity prices and related sectors such as the miners,” Hargreaves Lansdown equity analyst, Keith Bowman, told Reuters.

Click here for Bloomberg News article in BDLive to read the full article

Click here for Reuters article to read the full article