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LME ALUMINIUM CASH

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Asian Commodities Stocks Dive on China's Plan to Rein In Prices

05/20/2021 | 04:14am EDT

By Clarence Leong

Shares of Chinese miners and other Asian commodities companies slid sharply after Beijing signaled its intent to tame surging commodity prices and traders moved to cash in on outsized gains made earlier this year.

Yanzhou Coal Mining Co.'s H-shares were down 8.7% at HK$9.59 in afternoon trade on Thursday, while China Coal Energy Co. was off by more than 11% at HK$4.30. Gold miner Zijin Mining Group Co. lost 5.9% and Aluminum Corp. of China Ltd. retreated 7.1%.

South Korean steelmaker Posco closed 5.3% lower.

All five of the companies' shares had strong runs so far this year as post-lockdown recoveries in major markets sent prices of a wide range of materials soaring.

Thursday's stock declines mirrored movements in commodities futures markets. Benchmark coking-coal futures on the Dalian Commodity Exchange plunged by the daily limit of 8.0% in morning trade, while the most-traded iron-ore futures contract was last down about 5.7%. The ANZ China Commodity Index ended 1.3% lower Wednesday, with industrial metals leading the losses and copper falling especially sharply.

The moves followed local Chinese media reports on Wednesday saying that China's cabinet has pledged to take steps to ensure sufficient supply of commodities and stable prices, calling the recent rallies "unreasonable."

The renewed calls from Beijing seem to have triggered profit-taking in high-flying commodities shares, UOB Kay Hian analyst Sandra Huang said.

Ms. Huang noted that despite their outperformances this year, Chinese coal miners' valuations still look cheap based on their price-to-book ratios. Yanzhou Coal and China Coal have risen 54% and 85%, respectively, in the year to date.

Write to Clarence Leong at clarence.leong@wsj.com

(END) Dow Jones Newswires

05-20-21 0413ET

Stocks mentioned in the article
ChangeLast1st jan.
ALUMINUM CORPORATION OF CHINA LIMITED 2.38% 4.74 End-of-day quote.72.99%
CHINA COAL ENERGY COMPANY LIMITED 2.86% 4.67 End-of-day quote.100.43%
CHINA PETROLEUM & CHEMICAL CORPORATION -0.28% 3.56 End-of-day quote.2.59%
CNOOC LIMITED -1.16% 7.7 End-of-day quote.7.24%
DJ INDUSTRIAL -0.42% 34935.47 Delayed Quote.14.63%
GOLD -0.33% 1807.99 Delayed Quote.-4.41%
PETROCHINA COMPANY LIMITED -0.61% 3.24 End-of-day quote.35.00%
POSCO 2.09% 366500 End-of-day quote.34.74%
S&P GSCI ALUMINUM INDEX 0.92% 166.6136 Delayed Quote.31.39%
S&P GSCI INDUSTRIAL METALS INDEX 0.65% 480.4097 Delayed Quote.24.92%
YANZHOU COAL MINING COMPANY LIMITED -3.35% 11.54 End-of-day quote.86.13%
ZIJIN MINING GROUP COMPANY LIMITED 1.10% 11.02 End-of-day quote.25.51%
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