BHP, Glencore share prices test new lows as commodities rout deepens

ValeIron Ore miningDavid Stringer

(Bloomberg) — BHP Billiton Ltd. and Glencore Plc led declines among global mining companies as commodity prices plunged on heightened concern of a sharp slowdown in China.

BHP, the world’s biggest miner, fell to a near seven-year- low and Rio Tinto Group slid to a near three-year low in Sydney, while Glencore slumped to a record low in Hong Kong. Gold producers bucked the trend, notching gains on strength in the price of the yellow metal.

Copper and oil prices hit six-year lows amid concern over the weakest growth for 25 years in China, the biggest consumer of metals to energy. Glencore Chief Executive Officer Ivan Glasenberg said Wednesday the world’s leading commodity trader was wrong-footed by the sharp slowdown in China.

“Everyone knows about oversupply, the biggest thing that’s hitting right now is the concern about China.” IG Ltd. market analyst Angus Nicholson said by phone from Melbourne. The copper price decline is another driver, he said.

Copper closed below $5,000 a metric ton on Wednesday for the first time since July 2009 and oil Thursday extended its decline from the lowest close in six years. The Bloomberg World Mining Index of 79 producers declined 0.5 percent to the lowest since 2009.

In contrast, gold producers surged as investors sought a safe haven, according to Gavin Wendt, Sydney-based senior resource analyst at Mine Life Pty. The metal held gains after advancing the most in three months Wednesday as prospects dimmed for a U.S. interest rate increase in September, boosting the metal’s allure.

“The gold price performance has been rather encouraging by comparison to other metals,” Wendt said. “The fact that it’s put in a steady performance is important, particularly in the context of how other commodities have performed.”