As the commodity rout gets worse, the market value of the top three Australian miners will drop by $11 billion.

(Reuters) – At current prices, Australia’s three biggest miners could lose more than A$16 billion ($11.12 billion) in market value on Monday. This is because China’s demand for commodities is falling and fears of a global recession are getting worse.

The value of Rio Tinto (NYSE: RIO), BHP, and Fortescue Metals shares listed in Australia was expected to fall by more than A $10 billion, A $4 billion, and A $2 billion, respectively.

Demand for iron ore has gone down because Chinese steel mills are making less steel. Prices of commodities like copper and aluminium have also gone down because people are worried that the U.S. Federal Reserve and other central banks will raise interest rates too quickly, which could send the world economy into a recession. [MET/L]

So far this month, the three big Australian mining companies have lost a total of about AUD 30 billion in market value. They are also likely to lose money for a third week in a row after hitting multi-week lows on Monday.

Rio Tinto, BHP, and Fortescue are all trading at their lowest points in a month.

“Are we doomed? Or is it darkest just before sunrise? “On Saturday, Jefferies analysts wrote about recent economic data, China’s COVID-19 lockdowns, and the Fed’s policy narrative.

They seemed to be leaning toward the second option. They were sure that the slowdown in demand for commodities would be followed by a recovery that would be led by miners. They were also sure that worries about a recession and rising prices would go away, allowing a recovery to happen.

Analysts at JP Morgan agreed that the sector faces risks, but they said that new policy support and the easing of COVID-19 lockdowns in China would lead to a rebound in the second half of 2022. They kept their “neutral” rating for Rio Tinto and BHP.

Graphic: Australian miners fall in June as commodity prices fall-https://fingfx.thomsonreuters.com/gfx/mkt/zgvomdkwjvd/Pasted percent 20image percent 201655698303129.png

In Australia, $1 equals $1.4382.