Glencore tumbles 30%

Investec issued a note this morning saying that should commodity prices continue to decline, shares in commodity companies, in particular Glencore (LON:GLEN), would be worthless.

Investors haven’t hung around to see if there is any weight to Investec’s view; the FTSE 350 Mining sector was down 8% by midday with Glencore trading below 70p, down over 30%.

“If major commodity prices remain at current levels, our analysis implies that, in the absence of substantial restructuring, nearly all the equity value of both Glencore and Anglo American could evaporate,” analysts at Investec said in a note to clients.

The prices of commodities are approaching multiyear lows after a brief lull in selling. Many fear that if recent support levels are broken, the downward pressure on mining stocks could increase.

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