OneSteel Drops by Record in Sydney After Profit Estimate Cut

OneSteel Ltd. (OST), Australia’s second- largest producer, fell by a record in Sydney trading after cutting its first-half profit forecast on lower iron ore prices and gains in the local currency.

OneSteel shares tumbled as much as 18 percent to A$0.99, the most since their debut in October 2000. They traded at A$1.025 at 11:07 a.m. local time. Net income in the six months ending Dec. 31, excluding one-time charges for an acquisition, will be in the range of A$55 million ($57 million) to A$75 million, the Sydney-based company said today in a statement. First-half profit last year was A$116 million.

Prices for iron ore, OneSteel’s biggest contributor to profit, have slumped about 30 percent in three weeks, the company said. OneSteel and bigger rival BlueScope Steel Ltd. have cut jobs as they battle higher costs and lower prices.

Iron ore prices may fall to their lowest in more than two years amid weak demand from traders and steel mills in China, the biggest buyer, before rebounding next year, Morgan Stanley said this week. OneSteel said it will give an update on trading conditions on Nov. 21 at its annual meeting.

To contact the reporter on this story: Soraya Permatasari in Melbourne at soraya@bloomberg.net

To contact the editors responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net; Rebecca Keenan at rkeenan5@bloomberg.net