S&P/ASX 200 Index (ASX: XJO) mining shares are having a tough end to the week.
At the time of writing, the BHP Group Ltd (ASX: BHP) share price is down 3.9%, Fortescue Metals Group Limited (ASX: FMG) shares are down 5.7%, while the Rio Tinto Limited (ASX: RIO) share price is down 2.6%.
Other heavy declines include the Chalice Mining Ltd (ASX: CHN) share price falling 5.5%, the Sandfire Resources Ltd (ASX: SFR) share price losing 4.5%, and the Nickel Industries Ltd (ASX: NIC) share price sinking 5.1%.
In summary, it's a rough day for ASX 200 mining shares.
What's happening to ASX 200 mining shares?
Sometimes volatility is unexplainable. But there could be a couple of reasons to explain what's going on today.
The ASX's largest players often follow the movements of what has happened in international share markets.
For example, the BHP Group Ltd (NYSE: BHP) share price dropped 4% overnight on the New York Stock Exchange. while the Rio Tinto plc (NYSE: RIO) share price fell almost 6% on the NYSE.
So, perhaps it is unsurprising that the ASX-listed shares of these names have dropped as well.
Respected media outlets are suggesting that weakness in China could be the cause of this latest sell-off.
Bloomberg has reported that some Chinese home buyers are no longer paying mortgage repayments on at least 100 projects that have stalled in more than 50 cities, according to researcher China Real Estate Information Corp, while share prices of Chinese banks have dropped on worries that bad debts could rise. Lockdowns to slow the spread of COVID-19 haven't helped the economy.
Bloomberg reported on comments made by Betty Wang, a senior economist at Australia and New Zealand Banking Group Ltd (ASX: ANZ):
If more home buyers cease payment, the spreading trend will not only threaten the health of the financial system but also create social issues amid the current economic downturn.
It was noted by the media outlet that the worsening picture for construction in China is punishing the iron ore price, which dropped 8% to below US$100 per ton for the first time this year. Copper prices also dropped again.
Rio Tinto update
ASX 200 mining share Rio Tinto today released an update for its 2022 second quarter, showing a rise in production of iron, copper and bauxite, but aluminium and titanium dioxide slag production fell.
It also told investors that higher rates of inflation had increased its closure liabilities, leading to an impact to underlying earnings.
