Sinking iron ore price sends ASX 200 mining shares tumbling

Woman in yellow hard hat and gloves puts both thumbs downWoman in yellow hard hat and gloves puts both thumbs down

ASX 200 mining shares are struggling today amid falling commodity prices, including iron ore.

The big three ASX 200 mining giants — Fortescue Metals Group Ltd (ASX: FMG), BHP Group Ltd (ASX: BHP), and Rio Tinto Ltd (ASX: RIO) — are all sliding today.

Let’s take a look at what’s at play.

Commodity prices suffer

The BHP share price is down 5.24% at the time of writing while Fortescue is 6.64% lower and Rio Tinto is 4.13% in the red.

All three are all iron ore explorers. On global markets overnight, the iron ore price has fallen 6.19% to US$136.50 per tonne, Trading Economics data shows. Aluminum prices have also slid 4.64%.

Meanwhile, iron ore on the Chinese Dalian Commodity Exchange (DCE) fell nearly 11%, Reuters reported.

Commenting on the slide, SinoSteel Futures analyst Cheng Peng said:

The plunge was driven by the domestic COVID-19 situation, as market expectations on demand failed, while raw material prices lost support on state planner’s output controls.

Meanwhile, analysts predict the BHP share price could be a buying opportunity, as my Foolish colleague James reported today.

Last week, Morgans kept its add rating on the company and lifted the price target to $54.30. This represents an 18% upside on the current share price of $45.93 at the time of writing.

Meanwhile, the Goldman Sachs equity desk handled a transaction of $215 million in Fortescue shares on Tuesday, the Australian Financial Review reported. The trade was rumoured to have been at $19.95 a share, a nearly 6% discount on Friday’s closing price of $21.22.

The post Sinking iron ore price sends ASX 200 mining shares tumbling appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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