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Shares in construction materials major CSR sank on Wednesday following comments by the company that the home building market may have peaked as "lead indicators ... are pointing to a softening".
There may also be concerns CSR has hedged its exposure to the price of aluminium too early, missing some of the recent gains.
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In mid-afternoon trading, shares in the group were down a heavy 12 per cent at $4.56, moving off the earlier low of $4.50 in active trading.
"While residential construction markets appear to have peaked from recent record levels of activity, construction currently under way will support demand for CSR's products in the year ahead," the company's chief executive, Rob Sindel, said.
"Lead indicators including building approvals are pointing to a softening in activity in residential markets," the manufacturer said in a statement, but the "non-residential market remains benign".
He was speaking after releasing the company's latest earnings, which disclosed a rise in the net profit to $183.8 million for the 12 months to March, up from $177.9 million earned a year earlier.
Discussing the share price rout, Mr Sindel said the shares had rallied hard in recent weeks, which may have prompted some reflexive selling.
Additionally the disclosure CSR has hedged much of its near-term exposure to the price of aluminium may have encouraged some investors to sell, on concerns that the company may have missed some of the upside in the price of the metal.
"With the hedging, we're comfortable that it has de-risked a lot of the business," he said.
Over production of aluminium metal by Chinese producers has caused widespread pain for other producers, forcing a global restructuring of the industry.
"China has announced curtailments (of aluminium production) in three of the past four years," Mr Sindel said, "but it never eventuates."
Mr Sindel re-iterated he would like to offload his minority holding in the Tomago aluminium smelter in the Hunter Valley, but as this is only a small part of the much larger portfolio of aluminium assets operated by Rio Tinto, achieving a sale will not be easy.
Even though the residential construction market may have peaked, a continued high level of immigration will sustain activity in the industry, he said, which is being led by activity in NSW and Victoria with Western Australia remaining weak, with Queensland also showing recent softness.