UBS offers mildly optimistic view of steel, stocks to buy and sell

UBS steel analysts are cautiously optimistic on a return to growth for the steel industry (SLX), believing steel demand is heating up and the auto and manufacturing sectors can drive growth forward.

UBS actually sees steel prices falling next year, but producers that have lowered costs and restructured are poised to perform well; the firm likes Nucor (NUE +0.4%) and Steel Dynamics (STLD +0.3%) as stocks to buy.

However, higher fixed and legacy type costs will have a severe impact on other well-known names in the sector; the firm downgrades U.S. Steel (X -0.8%) and Reliance Steel (RS -0.1%) to Neutral while AK Steel (AKS +0.2%) and ArcelorMittal (MT -1%) are cut to Sell due to deteriorating fundamentals.

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Comments (1)
  • wesleyvp
    , contributor
    Comments (2) | Send Message
    Mittal to sell? This is a bargain now!
    26 Oct 2013, 08:55 AM Reply Like
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