Steel prices on the Shanghai futures index fell 5% in a single session yesterday, leading to a further 3.9% fall in iron ore prices. A knock on effect was felt on the worlds stock markets as mining shares followed suit and billions were knocked off the value of the four big majors, with more still to come. Vale was down by 4.5%, BHP by 4% and Rio Tinto by 2.2%. Australia’s Fortescue Metals was worst hit with a fall of 5.8%, making a total drop for the year so far of 40%.
As ever the Chinese are to blame, as their economy refuses to allow itself to be kick started.
Sign of the times perhaps that these are markets where US consumption appears to have become irrelevant.
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