More JSE pain today: mining stocks clobbered in Asia as commodities slide

(Bloomberg) — BHP Billiton Ltd., the world's biggest mining company, reached a 10-year low in Sydney trading as Rio Tinto Group and Fortescue Metals Group Ltd. also declined amid a deepening collapse in commodity prices.

Producers plunged as copper dropped below $4,500 a metric ton Monday for the first time since 2009, nickel touched the lowest in more than a decade and zinc to silver declined. The Bloomberg Commodity Index of returns on 22 raw materials hit the lowest since 1999 Monday and has plunged 22 percent this year. U.S. oil rose back above $42 a barrel after Saudi Arabia pledged to help stabilize markets.

Mining companies have been hit by slowing economic growth in China that has reduced demand in the biggest commodities user and pushed metals prices lower, spurring some producers to cut unprofitable output. Industrial metals have also retreated as the dollar strengthened on speculation that the Federal Reserve will boost interest rates in December.

"Wild gyrations in oil and another copper tumble could see further pressure on resource stocks," Michael McCarthy, chief markets strategist in Sydney at CMC Markets, said in an e-mail. "The rhetoric from the Fed suggests numbers would have to fall off a cliff to stop an interest-rate rise in December."

Melbourne-based BHP fell as much as 2.1 percent to A$19.65, the lowest since November 2005, and was 1.4 percent lower at A$19.78 at 11:30 a.m. in Sydney. Fortescue slumped as much as 5.1 percent, South32 Ltd. tumbled as much as 4.5 percent and Rio Tinto slipped as much as 1.3 percent.

Raw-materials prices have also been put under pressure on expectations that U.S. policy makers will soon raise rates for the first time since 2006. A stronger dollar makes metals priced in greenbacks costlier for buyers holding other currencies.