Brent crude and iron ore prices tumble

Global markets suffered a rout in commodities as Brent crude fell below $40 a barrel for the first time in almost seven years and iron ore hit a 10-year low.

The slide in iron ore to less than $40 a tonne sent mining shares sinking.

Anglo American was the biggest faller on the FTSE 100, shedding 12.3%.

The fall in oil prices followed declines on Monday as the Opec cartel refused to reduce record high output late last week despite oversupply.

James Hughes, chief market analyst at GKFX, said: "It seems that whatever happens, Opec will not budge and yet again have reiterated their stance that the markets will undo this mess themselves."

Shares in Anglo closed at a record low after the company said it would sell huge chunks of its business and reduce its workforce by nearly two-thirds.

The stock has fallen almost 73% this year - far more than its rivals - largely due to higher-cost iron ore mines than the likes of BHP Billiton or Rio Tinto.

The price of iron ore fell to $39.60 on Tuesday. It peaked close to $200 a tonne in 2011.

The slide in the material used to make steel was aided by China's weak trade performance last month. Those figures dashed hopes that the world's second-largest economy would level off in the fourth quarter.

Steel pipes wait to be loaded on to ships at Lianyungang, in eastern China's Jiangsu province.

Markus Huber, senior analyst at Peregrine & Black, said it was increasingly clear that China was "still far off from turning the corner despite countless measures like several rate cuts".

London-listed mining stocks have fallen by about 50% this year as China's economic growth continued to slow.

Shares in Rio Tinto closed down 8.4% on Tuesday after the company announcing plans to boost aluminium production next year by about 10%.

"Just what the world needs - more aluminium," commented analyst David Gagliano of BMO Capital Markets.

BHP fell 5%, while Glencore dropped 6.9%, with the FTSE 100 finishing the day 1.4% lower at 6,135 points.

Beaufort Securities trader Basil Petrides said: "The miners will probably continue to weaken while the Chinese economic outlook remains a concern."

Brent crude later rebounded to be trading at $40.77 a barrel, while US crude rose 29 cents to $37.94 a barrel.