Mining, energy stocks smashed in commodity rout

Photo: Getty Images / File

The ASX200 finished down 0.9% today but it masked a bloodbath for some huge companies in the mining and energy sector.

Billions of dollars were wiped from the once-high flying mining sector after oil prices fell to seven years lows and base metals continued their slide.

The materials sector hit its lowest point since May 2005 and energy stocks as a group lost more than 6% in value in one day.

Here’s the chart for the materials sector:

The local market as a whole closed at a three-month low with the ASX 200 at 5,108 points.

BHP, the world’s biggest miner and a favourite of superannuation funds and retail investors because of its steady dividends streams, fell to a 10-year low and below the key support level of $18.

At the close, BHP had in one day lost 5.2% to $17.050, a long way from $24.90 four weeks ago.

“BHP is getting destroyed today,” Chris Weston of IG told Business Insider. “It’s not a pretty picture to be a BHP shareholder at the moment.”

Everyone is questioning how much further commodity prices can fall, he says.

Other miners were also hit hard with Rio Tinto at $42.40, down 4.3%, and BHP spinoff South32 down 8% to $1.03.

From their respective peaks in May 2008, shares in BHP and Rio Tinto have lost 62.4% and 65.6% respectively.

Andrew Forrest’s Fortescue Metals closed down $1.81, down 3%. That’s down 86.5% from its peak in June 2008.

Qantas, which tends to rise when oil falls, was up today almost 5% to $3.86.

Woodside Petroleum was down almost 4% to $26.89. Oil Search, which Woodside today abandoned as a takeover target, dropped more than 16% to $6.29.

Santos shed 13% to $3.31 and LNG fell 11.5% to $0.995.

The BHP share price has been under intense pressure since the fatal disaster in Brazil at the Samarco iron ore mine last month. Analysts calculate impact from the mud slide will strip about 4% from BHP’s profits,

There also will be very large compensation payments to be made for the loss of at least 12 lives, the damage to a local village and reported pollution of a river system.

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