China's demand for iron ore falling
FEARS of a hard economic landing for China were reignited as BHP Billiton, the world's biggest mining company, yesterday said that the country's appetite for iron ore, which is used in steel production, is declining.
The president of the mining giantis iron ore division, Ian Ashby, said: "The [Chinese] economy is shifting, it's changing. Steel growth rates will flatten and they have flattened. The big infrastructure build clearly will come to an end."
Mr Ashby also predicted that iron ore demand from China would hit "single digits, if it's not already there".
The warning over the growth prospects of the world's second-largest economy prompted a sell-off in equity markets. Miners were the worst fallers on the FTSE 100, with BHP Billiton sliding 83p to 1,935p while Rio Tinto was 150p lower at 3,464.5p.
Brenda Kelly, a senior strategist at CMC Markets, said: "The effects of a China slowdown are all too apparent in European equity markets."
Benchmark copper prices meanwhile fell nearly 2 per cent.