Stock markets were rattled on Monday by worries over the Chinese economy and Federal Reserve tapering, leading to big sell-offs in commodities and shipping equities.
US futures fell by more than 1% and European equities hit a two-month low, but the rout has largely been led by the raw materials sector.
Iron ore future slipped below $100 per tonne on Monday on the Dalian Commodity Exchange, continuing the slide seen over the past five weeks or so. Base metal prices also took a hit.
UBS has reduced its 2021 iron ore price forecasts by around 10%.
Wayne Gordon, executive director of commodities and FX at UBS Global Wealth Management, told Bloomberg on Monday that the investment bank expects iron ore prices to remain at between $80 and $90 per tonne into 2022.
Shipping stocks
Most shipping equities took a knock on Monday, but bulker stocks — which are largely dependent on Chinese demand for raw materials — bore the brunt of the rout.
Chinese bulker owner Jinhui Shipping & Trading saw its share price dive by 19.9% on Monday on the Oslo Stock Exchange, while Golden Ocean Group saw its shares dip by as much as 13.5% in the Norwegian capital during the day's trading.
Shares in newcastlemax owner 2020 Bulkers have taken an 11% hit since the market opened in Oslo.
The only bulker company to have a good day on the Oslo Stock Exchange was Western Bulk Chartering, which saw its share price advance by 13.3% during its first day of trading as a public company.
Arctic Securities has been engaged as a "stabilisation manager" to help stabilise Western Bulk's share price during its first month of trading.
Major miners
Shares in major mining companies saw significant falls on Monday after China put more restrictions on industrial activity.
BHP Group was down by 4.2% during the morning in London, while in Australia, Rio Tinto Group lost 3.6% and Fortescue Metals Group dropped by 3.7%.
Vale's pre-market share price was down by 4.8% before the New York Stock Exchange opened on Monday.
Traders worldwide have been spooked by the risk of contagion from the $300bn debt crisis at developer China Evergrande Group, which has compounded concerns over the Chinese economy.
As well as China, stock markets have also been worried over economic stimulus from the US Federal Reserve potentially being smaller than hoped and uncertainty over the US economic strategy.
Inflation and strong commodity prices have also added to fears that the global post-pandemic recovery is slowing.
The Stoxx Europe 600 index, which tracks large, mid and small-capitalisation companies across 17 European countries, fell by 1.9% on Monday.
