FRANKFURT/PARIS (dpa-AFX) - Shares of steel producers suffered particularly on Monday from the weakness of the Chinese real estate sector. Among the weakest stocks in the MDax, Thyssenkrupp shares lost 2.4 percent to 6.77 euros. The index of mid-cap stocks fell one percent.
Among the biggest losers in the SDax, Salzgitter shares slumped 2.7 percent. Here, a negative analyst comment also proved to be a burden. The second-tier index was down 0.7 percent.
In Paris, ArcelorMittal shares fell by almost three percent. In addition, securities of mining companies were under pressure throughout Europe.
Shares in European mining and steel companies suffered from the recent fall in iron ore prices. This, in turn, according to observers, resulted from the fact that China's persistently weak property market is causing construction companies to hold back on restocking their steel inventories ahead of the National Day holiday on October 1.
Typically, demand for steel surges ahead of the National Day holiday, which falls in the middle of the usual seasonal upswing in construction activity in China. This year, however, the crisis in the Chinese real estate market is casting a shadow over the industry.
Currently, there are new negative headlines from the real estate giant Evergrande. The latter had announced that it was unable to take out new loans due to an ongoing government investigation. This fueled fears of further measures by the Beijing government against the sector, which is already struggling with a debt crisis.
Commenting on Salzgitter, analyst Moses Ola of U.S. bank JPMorgan wrote that the steel group's lowered target range for pretax profit this year due to its Aurubis stake was noticeably below market expectations, which are now expected to fall significantly. The alleged fraud by individual scrap suppliers is burdening the Aurubis copper group with a low three-digit million sum. In addition, the current estimates for 2024 also contain significant risks for Salzgitter's share price due to falling steel prices, Ola continued./la/ag/men