Australia Stocks: Atlas, BHP, Paperlinx, Rio, Santos, Woodside

By Shani Raja

Dec. 19 (Bloomberg) -- The S&P/ASX 200 Index fell 60.70 points, or 1.7 percent, to 3,520.50 at 10:20 a.m. in Sydney, snapping a two-day gain. The broader All Ordinaries Index lost 50.30 points, or 1.4 percent, to 3,471.40, while the futures contract expiring in December dropped 1.8 percent to 3,508.

Mining shares: BHP Billiton Ltd. (BHP AU), the world’s largest mining company, slumped A$1.31, or 4.2 percent, to A$29.69, the most since Dec. 12. Rio Tinto Group (RIO AU), the world’s third-biggest mining company, dropped A$1.66, or 4.2 percent, to A$38.34.

Copper tumbled to the lowest price in more than four years as metal inventories climbed, signaling waning demand during the global recession. Copper futures for March delivery dropped 5.2 percent to $1.3015 a pound in New York.

A measure of six metals trading on the London Metal Exchange fell 2.8 percent, with copper slumping 4.6 percent.

Oil companies: Woodside Petroleum Ltd. (WPL AU) slumped A$1.66, or 4.9 percent, to A$32.15, the lowest since Dec. 5. Santos Ltd. (STO AU) declined 46 cents, or 3.3 percent, to A$13.64.

Crude oil fell below $36 a barrel for the first time since July 2004 on speculation the drop in demand will outpace OPEC supply cuts as the economy weakens. Crude for January delivery dropped 9.2 percent to $36.36 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange.

Atlas Iron Ltd. (AGO AU), an Australian iron ore producer, gained 2 cents, or 2.6 percent, to 79 cents, the highest since Nov. 5. Atlas signed a long-term sales accord with a “medium- sized” Chinese steel mill for 30 percent of production from its Pardoo project.

Fortescue Metals Group Ltd. (FMG AU) slumped 11 cents, or 4.7 percent, to A$2.25, the lowest since Dec. 8. Australia’s third-biggest producer of iron ore said $1.5 million of its cash has been frozen in accounts because of legal action relating to changes made to shipping contracts.

Paperlinx Ltd. (PPX AU) tumbled 23 cents, or 21 percent, to 83 cents, a record low. Australia’s largest paper maker said it will breach lending covenants after failing to complete some asset sales in Europe.

Qantas Airways Ltd. (QAN AU) surged 15 cents, or 6.2 percent, to A$2.58, the highest since Nov. 12. British Airways Plc said merger talks with Qantas Airways Ltd. were called off after the carriers failed to agree on who would control the new company.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.