Mining giants Rio Tinto Ltd (RIO.AU), Anglo American and BHP Group Ltd (BHP.AU) were all downgraded after a gauge monitoring sector demand flashed a strong 'sell' signal.
The 'restocking indicator' from broker Panmure Gordon reported its weakest signal since mid-2022, with a turnaround after a long bull run.
Despite persistently weak activity data from China's real estate sector, a key source of demand for steel and hence iron ore and other metals, the indicator shifted to its most negative in two years.
This was on the back of China's steel PMI survey reports weakening domestic demand, coupled with an unseasonal lift in steel inventories
"Local demand growth is weak," said analyst Ben Davis, noting the indicator had shifted due to finished goods and visible iron ore stockpiles at port both "ballooning" unseasonably, and that China's steel net exports are close to record highs.
The industry is now loss-making, prompting an early start to 2024's destock, inflating the industry's ore and scrap surpluses."
Imported iron ore's fundamentals are deteriorating, undermining its price performances, he added.
