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A truck hauls a load at Teck Resources Coal Mountain operation near Sparwood, B.C. in this file photo.The Canadian Press

The eye-popping run-up in mining shares since the start of the year is hitting a rough patch.

A weak reading on China's manufacturing sector hammered the stocks of many miners on Tuesday, demonstrating the fragility of the new optimism surrounding commodities.

Analysts cautioned that the recent surge in mining shares may have been too much, too fast, for a sector that was devastated in 2015.

"We are a little concerned about the scale of recent gains," Caroline Bain and her team at Capital Economics wrote in a note on Tuesday. "Prices are starting to look vulnerable if, as we expect, the U.S. economy bounces back."

Any fall in mining shares would be painful for Canadian investors. Since the start of the year, stocks in the S&P/TSX materials index have jumped 38.2 per cent, by far the best performance of any industry in the market benchmark.

All of the top 10 performing stocks on the Toronto Stock Exchange this year are miners. Several of the big gainers, including Kinross Gold Corp., Barrick Gold Corp. and Teck Resources Ltd., have more than doubled since Jan. 1.

But the sector's huge advance is now creating skeptics. Citigroup analysts argued in a report last month that the share prices of global miners had "run too hard, too fast and valuations look stretched."

Ms. Bain made a similar point on Tuesday. She had previously been among the more optimistic observers of the commodity markets, so her reversal was noteworthy.

Her new, darker outlook is based on what she sees ahead for the U.S. dollar. Since the start of the year, persistent weakness in the greenback has helped to drive metals higher because it makes them cheaper to buyers outside the United States.

But Ms. Bain thinks the U.S. dollar is due for a rebound as the American economy picks up and the U.S. Federal Reserve Board moves to boost rates later this year. "If we are right that the Fed is going to tighten rates more aggressively than the market expects, we could see the dollar strengthen again, which would put commodity prices under pressure," she said.

Miners would be hit even harder if China shows fresh signs of slowing down.

Recent gains in mining stocks have been supported by indications that China is loosening credit and bringing forward spending on infrastructure, as Beijing seeks ways to stimulate its economy.

Since China accounts for roughly half of the global consumption of many key raw materials, its continued industrial vigour is vital for miners.

However, a private survey published on Tuesday suggested Chinese factories slowed further in April.

The reading on the Caixin China Purchasing Managers' Index slid to 49.4, down from 49.7 in March. A reading above 50 indicates expansion while below 50 points to contraction.

"These fluctuations indicate the economy lacks a solid foundation for recovery and is still in the process of bottoming out," said He Fan, chief economist at Caixin Insight Group. "The government has to keep a close watch on risks of a further economic downturn."

Mining stocks slumped after the survey's publication. In London, Anglo American PLC lost 12.8 per cent and Glencore PLC dropped 8 per cent.

In Toronto, HudBay Minerals Inc. plunged 8.6 per cent, while Teck Resources Ltd. surrendered 6 per cent.

Adding to the concerns around metal prices is evidence that China's commodity markets are turning into speculative bubbles.

While gold's 21-per-cent jump since New Year's Day has grabbed the attention of many investors, the best performing commodity in global markets has been steel rebar traded in Shanghai. Prices for rebar – plain, utilitarian rods used to reinforce concrete walls – have levitated 47 per cent on the Chinese exchange since the beginning of the year.

China's retail investors have rushed into the commodity fray, boosting the prices of futures contracts on everything from iron ore to eggs. The frenzy bears a strong resemblance to the country's stock-buying mania in the first half of last year, which turned into a market rout weeks later.