Weir Group share price falls on ‘softening’ industry demand
FTSE 250 firm Weir Group’s share price sunk up to six per cent on news of “softening” demand for original equipment this morning.
Shares fell to £16.76 in early morning trading, as the engineering firm issued an unwelcome update about its North American oil and gas market activity.
“There was a considerable softening in demand for original equipment and some order book delivery deferrals,” the company conceded during its investor roadshow in London today.
It added that “initial signs of pricing pressure” crept into its oil and gas aftermarket business in the second half of August.
Barclays cut its target price for the company from £26.00 to £25.00 on the news, according to reports, with Weir vulnerable to volatility in the commodities and mining sectors.
Oil prices fell yesterday after nearing the $80 (£61.85) per barrel mark, with Brent Crude slipping back one per cent to $77.27 overnight, and crude oil in general falling to $68.72.
Meanwhile, shares in Sirius Minerals plummeted 11 per cent this morning on news it would have to spend up to another $600m on building a polyhalite mine in Yorkshire.
Earlier this week Weir rival Schlumberger warned that excess supply in the shale basin of west Texas and New Mexico has surpassed transport capacity, potentially leading to a lull in drilling activity.