Seven Foreign Steel Producers

Yesterday the Illinois-based Metals Service Center Institute ((MSCI)) announced that at current shipping levels US steel inventories represent a 2.9 month supply.

The news release stated:

"Steel shipments from U.S. metals centers totaled 2.25 million tons in May, a reduction of 48.5% from May 2008 shipments. Steel shipments for the first five months of the year, at 12.3 million tons, are down 44.3% compared with last year’s period. U.S. steel inventories at metals service centers totaled 6.46 million tons at the end of May, 38.3% lower than year-ago inventories. At current shipping rates, those stocks represented a 2.9-month supply.

Canadian metals service centers shipped 375,500 tons of steel products during May, or 40.3% lower volume than a year ago. Year-to-date shipments in Canada total 2.06 million tons, down 35.6%. End-of-month stockpiles of 1.12 million tons of steel products were 30.3% lower than last year and, at current shipping rates, are equal to a 3.0-month supply."

Worldwide commodity prices have rebounded sharply in recent weeks. Steel producers have been hot as investors loaded up on them. However commodity prices are extremely volatile and investment in this sector is not for the faint-hearted. With that in mind, let's take a quick review of the seven steel companies that trade on the New York Stock Exchange.

1. Luxembourg-based ArcelorMittal (MT) is a global steel producer with operations in 20 countries. In 2008, total revenue was $110B. MT is a high beta stock with a reading of 2.3. The current yield is 2.29%.

2. Companhia Siderurgica Nacional (SID) is a Brazil-based company that produces carbon steel and other steel products. SID has a profit margin of 31% and last year's revenue was $1.8B. Its Current dividend yield is 3.46%. From a March of low nearly $8, the stock rebounded to close at $22.73 yesterday.

3. Gerdau (GGB) is another Brazilian steel maker engaged in the production of long, rolled steel. Gerdau operates in 14 countries, mainly in Latin America. Its annual earnings growth rate is 47%.

4. Russia-based Mechel OAO (MTL) is a vertically integrated mining and steel company with factories in Russia, Romania and Lithuania. Mechel also owns and operates two trade ports, a railway and an energy company. Beta is 2.6 and the stock has fallen 83% in the last 52 weeks.

5. Posco (PKX) is one of the world's largest steel makers and is based in Korea. Posco does not pay regular dividends. The annual earnings growth rate is 30%. After hitting $40 in March, the stock has more than doubled during the recent rally.

6. Tenaris (TS) is engaged in steel pipe manufacturing and distribution operations. The dividend yield is 1.79% and the beta is 1.5.

7. Argentina-based Ternium (TX) has a beta of 2.5 and a market cap of $3.4B. Its average annual revenue growth rate is 20%. TX has more than tripled from the lows it reached in March.

Comments

[PutneyHillYank:]

OK good try but what about HSVLY outa SA that baby has its own mine to boot. I own it and advise all interested to join me. Its cheap here.

Jun 17 04:49 PM

[TS owner:]

TS had a $0.86 dividend per ADS, for a yield od 3.3%.

Jul 14 04:16 PM