PERTH (miningweekly.com) – Advisory firm Deloitte’s Western Australian (WA) Index fell during August, with the market capitalisation of Western Australia-listed companies falling 1.9%.

Deloitte clients and markets partner for Western Australia, Tim Richards, said that while there had been steady gains across most base metals, apart from tin and copper, which both experienced losses during the month, iron-ore prices suffered a significant decline owing to concerns around the strength of the Chinese economy.

“Western Australia’s reliance on the Chinese economy has come to the forefront this month, with concerns surrounding the outlook from the manufacturing powerhouse affecting resources companies in the WA Index,” Richards said.

The iron-ore price fell 7% in August, to close at $89/t, taking the total fall to 35% since the start of the calendar year and close to a five-year low. The decline was attributable to a combination of sluggish Chinese property prices and oversupply by major exporters – in Australia and Brazil – driving Chinese stockpiles to record highs.

Richards pointed out that uranium posted the biggest gain in August, with an increase of 9%, on the back of supply disruptions as Cameco Corporation temporarily shut its McArthur River mine, in Canada, owing to industrial action. The mine is one of the world’s biggest sources of uranium, contributing around 10% of global supply.

Meanwhile, the local equity market experienced a lackluster August performance, with the index posting a loss of 1.9% and the All Ordinaries with zero movement. The big iron-ore producers BHP Billiton, Rio Tinto and Fortescue, suffered significant drops in share prices over the month – ranging from 5% to 15%, representing an almost A$20-billion combined decrease in market capitalisation across these companies.

Richards added that international equity markets saw steady gains, apart from the Nikkei, which suffered a decrease of 1.3%. The US S&P 500 posted a 3.8% gain despite geopolitical worries on the back of news that consumer confidence in the US was at its highest levels since late 2007.

The FTSE increased by 1.3% following the announcement of stimulus measures and monetary easing to revitalise the eurozone economy by the president of European Central Bank.