Sept. 4 (Bloomberg) -- Outotec Oyj, a Finnish supplier of equipment and services to mining companies, slumped the most 12 weeks after Fortescue Metals Group Ltd. cut its capital spending forecast.
Outotec fell 5.6 percent to 34.54 euros at the 6:30 p.m. close in Helsinki trading, the second-biggest intraday decline in the Stoxx Europe 600 index, and the most since June 13. Outotec has lost 15 percent since Aug. 21 on concerns China’s economic growth is slowing.
“The decline started on bad news from China,” Markus Liimatainen, an analyst at FIM Bank Oyj, said by phone. “Most firms that have recently announced production cuts or postponing of investments have had something to do with iron ore, which is driven by China.”
Fortescue, Australia’s third-biggest iron ore producer, today cut its full-year capital spending forecast 26 percent to $4.6 billion, following other miners including BHP Billiton Ltd. in delaying expansion as commodity prices fall.
Concerns over a slowdown in the Chinese economy have sent iron ore trading to near three-year lows. Manufacturing in the world’s second-largest economy slowed for the first time in nine months in August, a government survey of purchasing managers showed on Sept. 1.
Outotec’s revenue will increase to 1.97 billion euros ($2.5 billion) this year, corresponding to a 42 percent gain, according to the median estimate in a Bloomberg survey of 18 analysts. Last year, sales grew 43 percent from 2010.
“The sales growth we’ve seen in the past couple of years will cool down,” Liimatainen said. “It’s not that Outotec is fading, rather the expectations are quite high.”
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