S&P/ASX 200 Index (ASX: XJO) mining shares are dragging on the market today. It comes as one major bank reportedly drops its expectations for base metal prices.
The S&P/ASX 200 Materials Index (ASX: XMJ) – home to the market's major miners – is tumbling 2.29% right now. Meanwhile, the broader index is down 0.7%.
Many of the sector's biggest names are dragging it lower on Monday. Here's how some of the ASX 200's favourite mining shares are performing:
- Fortescue Metals Group Limited (ASX: FMG) down 2.02%
- BHP Group Ltd (ASX: BHP) down 2.58%
- Rio Tinto Limited (ASX: RIO) down 2%
- IGO Ltd (ASX: IGO) down 2.86%
- Nickel Industries Ltd (ASX: NIC) down 0.52%
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ASX 200 mining shares suffer amid bearish sentiment
Most ASX 200 mining shares are falling amid news Australia and New Zealand Banking Group Ltd (ASX: ANZ) dropped its short-term targets for some base metals.
The bank's chief economist Richard Yetsenga has dropped targets for aluminium, zinc, and nickel, the Australian Financial Review reports.
The expert was quoted as saying:
Persistently high inflation is causing the central banks of developed economies to tighten monetary policy, risking a reversal of the economic rebound.
Supply side issues can't be ignored. Mining headwinds associated with environmental, social and governance (ESG) requirements are exacerbating labour shortages and high-energy costs, stalling plans to boost the output of copper, aluminium, and nickel. This is on top of the disruptions caused by Russia's invasion of Ukraine.
Not all was dire, however. Yetsenga believes China's COVID-19 policy could support demand for metals through the remainder of 2022 while the other metals still hold upside risks.
The prices of aluminium and nickel were trading at their lowest in more than a year last week while the price of zinc hit its lowest point since October.
The price of copper also spiralled to a 19-month low last week although Yetsenga reportedly also noted investor position for the orange metal is now bearish.
