Stocks in Steel Sector Drop Heavily after China Imposes Price Control
The Steel Index fell 4.99 points, or 8.97%, to 50.63 points, with a total trading value of 905.61 million baht, tracking the decline in iron ore prices.
Today (May17), the Steel Index fell 4.99 points, or 8.97%, to 50.63 points, with a total trading value of 905.61 million baht, tracking the decline in iron ore prices, which have fallen more than 10%. As a result, steel sector stocks today closed with huge losses, led by INOX, SAM, TGPRO, GJS, BSBM.
Poscp-Thainox Pcl. (INOX) dropped ฿0.23/share or 16.08% to ฿1.20/share with a trading value of 101 million baht.
Samchai Steel Industries Pcl. (SAM) dropped ฿0.23/share or 15.23% to ฿1.28/share with a trading value of 29 million baht.
Thai-German Products Pcl. (TGPRO) dropped ฿0.05/share or 13.51% to ฿0.32/share with a trading value of 56 million baht.
G J Steel Pcl. (GJS) dropped ฿0.05/share or 11.63% to ฿0.38/share with a trading value of 64 million baht.
Bangsaphan Barmill Pcl. (BSBM) dropped ฿0.21/share or 11.11% to ฿1.68/share with a trading value of 20 million baht.
According to Kasikorn Securities, iron ore prices have dropped more than 10% from their highs after the Chinese government announced steps to curb speculation and reduce iron ore imports from Australia. As a result, KSS considers it as negatively impacting on steel stocks.
Meanwhile, Asia Plus Securities recommended staying away from commodity plays for the short term. Steel-related goods prices that previously made all-time highs dropped on profit-taking late last week, e.g. iron ore (-8%), after China imposed price steel control measures. This has negative sentiment on steel plays.