Australian mining stocks, represented by the XMM, fell by as much as 0.7% on Thursday, hitting their lowest point since 11 July 2024. This marks the third consecutive day of decline for the sector.
Economic Concerns from China Impact Iron Ore Prices
The downturn in mining stocks is largely attributed to falling iron ore prices. Investors are anxiously awaiting details from China's third plenum regarding economic reform measures. Recent economic data from China, which is the world's largest consumer of iron ore, has been weaker than expected, fueling concerns over demand for the commodity.
Major Mining Companies Feel the Impact
Two of Australia's mining giants, BHP Group (ASX: ASX:BHP) and Rio Tinto (ASX: ASX:RIO), have not been immune to the sector's struggles. BHP Group's shares slipped by 0.4%, while Rio Tinto's shares declined by 0.6%. Both companies are heavily involved in iron ore mining, making them particularly sensitive to fluctuations in iron ore prices.
Year-to-Date Performance of the Mining Sub-Index
The mining sub-index has experienced a significant decline this year, falling 12.5% as of the last close. This ongoing slump reflects the broader challenges faced by the mining sector, including volatile commodity prices and uncertain economic conditions in key markets such as China.
The recent decline in Australian mining stocks underscores the sector's vulnerability to external economic factors, particularly those emanating from China. As investors await further clarity on China's economic policies and reforms, the performance of mining stocks will likely continue to be closely tied to developments in iron ore prices and overall demand.