Mining shares are declining this morning as last week’s rush towards the sector sparked by new stimulus measures in China, loses steam.
The sector is 2.1 per cent lower, with iron ore heavyweight BHP down 2.5 per cent to $44.24. Iron ore prices in Singapore have slipped 1 per cent to just below $US108 per tonne, after rallying almost $US20 higher last week.
The rally came as the Chinese government committed to more forceful stimulus measures to ensure the regional giant’s stuttering economy reaches its 5 per cent GDP growth target.
The retracement comes as Fitch Solutions’ BMI unit said they expected the gains in metal prices sparked by the measures to waiver going forward.
“We expect the reignited optimism over improved mainland Chinese demand, following the recent wave of stimulus measures, to remain short-lived,” they said.
“A sustained long-term uptrend remains unlikely until we see a turnaround in the mainland Chinese property sector.”
