The ASX has fallen to an 11-week low — are miners becoming the market’s weak link?

Australia’s biggest miners have shifted from market leaders to one of the ASX’s biggest drags.

The S&P/ASX 200 has fallen to an 11-week low, while the Materials index is down about 9% in September and roughly 12% from its late-August peak. BHP has lost about 12% from late-August levels and Fortescue around 10%, while Rio Tinto has also retreated from its August high.

The pressure is arriving as Australian banks are also weakening under rising rate expectations. That leaves the ASX exposed across two of its heaviest sectors at the same time.

China remains the main risk for iron ore. Its industrial economy is still expanding, but August data showed retail sales growth slowing to 0.4% and fixed-asset investment falling 7.2% over the first eight months of 2026.

For BHP and Rio, copper offers more diversification than Fortescue has. But copper volatility means that diversification has not prevented the recent sell-off.

The question for investors is whether mining weakness is simply reversing August’s strong run or signalling a harder period for the ASX.

The sell-off is broad, but the investment cases are not identical. Fortescue remains heavily dependent on iron ore. BHP and Rio generate substantial iron ore earnings but have spent years increasing their exposure to copper. That creates different sensitivities if China remains weak or commodity prices diverge.

For Australian traders, those differences allow a more targeted view than trading the ASX 200 alone. CFDs can provide long or short exposure to individual mining shares as commodity conditions and company outlooks diverge.

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China’s latest data produced two very different economic signals. Industrial production rose 5.2% from a year earlier in August, beating expectations and accelerating from July.

Domestic demand remained much weaker. Retail sales increased only 0.4%, while fixed-asset investment fell 7.2% over the first eight months of the year. The figures suggest widening economic imbalances between strong manufacturing and weak consumption and investment.

China can continue producing and exporting more manufactured goods without generating the same steel demand once associated with rapid property construction.

Property remains particularly weak. Investment in the sector has continued falling, and the housing downturn remains a drag on domestic activity.

Iron ore demand therefore rests increasingly on infrastructure, industrial activity and steel exports rather than a strong residential construction cycle. Fortescue has the greatest direct exposure to that shift.

SELL BUY

Fortescue has fewer commodity offsets than BHP or Rio. 

Iron ore still drives most of its earnings and cash flow, leaving the stock particularly sensitive to steel demand, Chinese property conditions and iron ore prices.

Its roughly 10% fall from late-August levels reflects that exposure.

BHP and Rio can lean more heavily on copper and other commodities when iron ore weakens. Fortescue’s green-energy investments may diversify the company over time, but they do not yet change the immediate earnings mix.

That creates a sharper two-way trade. A recovery in iron ore can quickly improve sentiment towards Fortescue. Continued weakness in Chinese steel demand leaves it with less protection.

BHP and Rio are deliberately becoming more copper-heavy. Both are investing in a metal tied to power grids, electrification and data-centre expansion, reducing their long-term dependence on iron ore.

But the recent pullback has shown the limits of that protection.

Copper has also become volatile after pushing to record territory earlier in 2026. Uncertainty over trade policy, the US dollar, and global growth has produced sharp swings in the metal.

SELL BUY

BHP and Rio therefore remain exposed to two separate commodity cycles: iron ore still supplies a large share of current cash flow, while copper is carrying more of the future-growth case.

If iron ore remains weak but copper strengthens, BHP and Rio have a clearer diversification advantage over Fortescue.

Weakness across both removes much of that cushion.

Mining weakness would be easier for the ASX to absorb if financial stocks were performing strongly.

They are not.

Australian banks have also come under pressure as surging oil prices and rising global bond yields revive concerns that interest rates could remain high or rise further.

The ASX’s latest fall to an 11-week low included weakness across both materials and financials.

That is a more difficult setup for the broader market than a resources correction alone.

Banks and miners dominate the Australian index. If one group weakens, the other can sometimes provide support. Simultaneous weakness leaves the market relying more heavily on smaller sectors such as healthcare, industrials and technology.

Oil has made that combination tougher.

Brent surged above US$100 in September as tanker attacks and disruption around Middle Eastern energy infrastructure tightened supply. It reached US$107.63 on September 10 before easing later in the week.

Higher energy prices increase inflation pressure and reduce the scope for lower interest rates.

For miners, that adds global growth and financing risk on top of China.

Three factors can change the current setup.

• China stimulus: Property and infrastructure measures capable of lifting steel demand would directly improve the outlook for iron ore producers. August’s data increase pressure on Beijing to support weak domestic demand.

• Iron ore versus copper: Fortescue remains more dependent on an iron ore recovery. BHP and Rio have more scope to benefit if copper outperforms.

• Rates and oil: Lower oil prices or easing bond yields would reduce pressure on the wider ASX, particularly banks and other rate-sensitive sectors.

• The combination matters more than any single catalyst.

A stronger China backdrop alongside firmer copper would favour diversified miners. Weak Chinese demand combined with high oil and rising rates would keep pressure on both resources and the broader index.

The split between BHP, Rio Tinto and Fortescue creates different trading exposures across the same resources theme.

Through Mitrade, eligible Australian clients can use CFDs to take long positions when expecting a mining share or index to rise, or short positions when expecting further weakness.

Stop-loss and take-profit orders can define exit levels, while pending orders allow positions to open only if a chosen price is reached.

Accounts can be funded in AUD, and a demo account is available for testing trading strategies without committing real capital.

Mitrade is regulated in Australia by ASIC. CFDs are leveraged products, so both gains and losses can be magnified.

Three things to watch next

1. China’s property and investment data: Continued weakness would keep pressure on the iron ore outlook.

2. Iron ore versus copper: Diverging commodity prices could widen the performance gap between Fortescue and the more diversified BHP and Rio.

3. Banks alongside miners: Continued weakness across both sectors would leave the ASX with fewer heavyweight stocks capable of supporting the index.

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