Major Australian mining stocks sink tracking iron ore price slump

Investing.com-- Shares of major Australian mining stocks fell sharply on Wednesday, tracking a decline in iron ore prices amid growing concerns that worsening global economic conditions will dent demand for the steel-making material.

BHP Group Ltd (ASX:BHP) and Rio Tinto Ltd (ASX:RIO)- Australia’s two biggest mining companies by market capital, slid 2.2% and 1.6%, respectively. The two also hit respective three-month lows.

Other miners Fortescue Metals Group Ltd (ASX:FMG) and South32 Ltd (ASX:S32) sank 3.2% and 2.5%, respectively, while the broader ASX 200 index fell 0.7%. 

Losses in mining stocks were an extension of a decline seen on Tuesday, when BHP clocked a nearly 90% slide in its net profit for the six months to December 31. 

Rio Tinto is also set to report a decline in its annual earnings, which it will report after the Australian market closes on Wednesday.

Pressure on mining stocks came chiefly from a sustained decline in global iron ore prices, which fell amid fading bets of early U.S. interest rate cuts and signs of worsening economic conditions in other major economies. Japan and the UK both entered a recession in the fourth quarter of 2023, while growth in the euro zone stagnated. 

Iron ore inventories in major Chinese ports were seen rising over the Lunar New Year holiday, while profitability among steelmakers was seen weakening, Reuters reports showed.