Why has the South32 share price tanked 4% to a 2-year low today?

It's been a bad day to own South32 shares…

| More on:
a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

It's been a decent showing today for most ASX 200 shares and the S&P/ASX 200 Index (ASX: XJO). At the time of writing, the ASX 200 has put on a tentative 0.17%. But the same certainly cannot be said of the South32 Ltd (ASX: S32) share price.

South32 shares are having a shocker today, no way around it. The mining stock closed at $3.25 a share yesterday but opened at $3.20 this morning before falling to a low of $3.09. Not only was that an intra-day low for South32, but it was also a new 52-week low and the lowest the miner has traded at since September 2021.

The shares have only slightly recovered off of that new floor at present, and are currently going for $3.11 each, down 4.31% for the day. So what's gone so wrong for South32 today that has prompted investors to give the company such a dramatic whack?

Why has the South32 share price just hit a new 52-week low?

Well, the first thing to point out is that it's not just South32 that is down in the dumps today. Most ASX mining shares are suffering similar fates.

For example, BHP Group Ltd (ASX: BHP) shares have lost 2.35% over today's trading and are down to $44.49 each. Fortescue Metals Group Limited (ASX: FMG) stock has lost 1.65% to $22.97. And Rio Tinto Limited (ASX: RIO) shares have gone backwards by 2.18% today to $119.16 a share. So something is clearly spooking the herd here.

And we might have a culprit. As my Fool colleague Bernd covered this afternoon, the latest trade data out from China has unveiled a 6.4% drop in overseas shipments, which was reportedly below expectations.

Like most miners, China is an important market for South32. So any indication of economic weakness is not going to be well received by investors.

Further, we have also seen some falls in commodity prices recently. According to Bloomberg, prices of copper, aluminium, lead and tin are all down at their most recent pricing, with aluminium dropping almost 1%.

As we covered just yesterday, aluminium is one of South32's most important commodities.

So it looks as though this perfect storm of negative catalysts has combined to give South32 shares this day that investors probably wish to forget.

At the current South32 share price, the ASX 200 mining stock is now down just over 21% year to date.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

A smiling miner wearing a high vis vest and yellow hardhat does the thumbs up in front of an open pit copper mine.
Broker Notes

Why Macquarie expects this ASX All Ords copper stock to soar 48% in a year

Macquarie forecasts another big year of gains ahead for this ASX All Ords copper stock. But why?

Read more »

Female miner standing smiling in a mine.
Broker Notes

Why Macquarie predicts Pilbara Minerals shares could surge 71%

Macquarie forecasts a big rebound ahead for Pilbara Minerals shares. Let’s find out why.

Read more »

Two mining workers in orange high vis vests walk and talk at a mining site.
Resources Shares

ASX All Ords mining stock sinks on US silver acquisitions

Investors are bidding down the ASX All Ords miner on US acquisition news. But why?

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

How these 2 tailwinds could boost the BHP share price into 2026

A leading expert forecasts that BHP shares are set to recover. But why?

Read more »

a miner holds his thumb up as he holds a device in his other hand.
Resources Shares

3 reasons why the BHP share price could still be a buy

There are a few reasons why this mining giant could be appealing.

Read more »

Miner standing in front of trucks and smiling, symbolising a rising share price.
Resources Shares

The pros and cons of buying Fortescue shares in June

Let’s dig into whether it’s a good time to invest in this mining giant.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Why did the Mineral Resources share price rip 15% higher today?

The iron ore and lithium giant was the fastest riser of the ASX 200 on Thursday.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Resources Shares

2030 forecast: As Australia's iron ore export earnings decline, copper will rise. What does this mean for BHP shares?

BHP is expanding its iron ore and copper production.

Read more »