ASX 200 mining shares have pared gains in June and now trade near three-month lows.
Despite rebounding sharply today, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) is trading almost 8% lower this past month.
Key drivers of the commodity trade have started to wind back in recent weeks resulting in a calming effect across markets.
Brent Crude now trades back at US$116 per barrel, while gold has softened to US$1,826 per troy ounce at the time of writing.
Other hot commodities, such as natural gas – and in particular, copper – have also pared gains, potentially signalling a slowdown in demand amid fears of a recession.
For reference, the copper price is down 13% over the past month, and 12% year over year. Each commodity's return since 20 May is seen on the chart below.
Another factor impacting the mining shares basket is production guidance downgrades.
That's been particularly nasty to these two ASX 200 mining shares.
Evolution Mining Ltd (ASX: EVN)
Shares in Evolution Mining have slipped a further 2% in today's session and now rest at $2.59.
The gold player has been under selling pressure this week after it announced a downgrade to its full year production and earnings guidance.
It now expects FY 2022 gold production to be around 640,000 ounces, down from 700,000 to 760,000 ounces previously.
Guidance has already been reduced twice from that upper figure. The miner also expects higher all-in sustaining costs (AISC) on this production.
As a result, investors have sold off the ASX 200 mining share and losses continue on Tuesday.
OZ Minerals Limited (ASX: OZL)
Shares in OZ Minerals have also weakened this week and now trade at $18.50. The losses culminated in a new 52-week low of $17.71 today as well.
OZ also released a downgrade to its FY22 copper production guidance and lifted its AISC forecasts yesterday.
The copper producer said COVID-19 and labour shortages were driving up costs. Ultimately, this poses a threat to profit margins and earnings.
In a similar vein to Evolution, investors have sold off OZ Minerals shares in response to the downgrade.
This could be key information going forward if more miners follow suit and start to downgrade production forecasts.
Long-term downtrend
Traders have pushed these two ASX 200 mining shares to their depths, continuing a long-term downtrend for both stocks.
Both the OZ Minerals share price and Evolution share price are down about 35% this year to date.
The past 12-month returns for each of these ASX 200 mining shares are seen in the chart below.
