US Steel -7.4% as tariff decision undermines bull case


Although the Commerce Department's decision not to impose tariffs on South Korea’s steel pipes used in the oil industry is not yet finalized, analysts believe the negative surprise of zero dumping margins and pressure on margins of tubular goods is of particular concern to US Steel (X -7.4%), concurrent with continued weakness in flat steel prices to begin 2014.

Wells Fargo analysts believe it is now less clear-cut if OCTG profitability can recover to prior levels, and that investors will be discouraged by the news as a favorable trade case ruling was part of the bull thesis on shares; the firm notes that every $30/ton reduction in domestic steel prices equates to roughly $450M in EBITDA headwinds, which are hard to offset merely by cost reductions.

Other steel producers also feel the pain: TS -6.1%, AKS -4.1%, NUE -0.6%.

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Comments (4)
  • d1ringer
    , contributor
    Comments (15) | Send Message
     
    Another case of our Government taking care of big business instead of it's own workers.

     

    “It's better to spend time on cutting costs like (CEO) Mario Longhi at U.S. Steel is doing than pursue anti-dumping suits, which are not effective.”

     

    Read more: http://bit.ly/MAyOFJ

     

    Nothing will be effective if countries can sell their products cheaper at our country's expense. All things being equal, the government wants to drag down the middle class to a lower status than to maintain people in this country working and making US companies profitable. All for the sake of the rich oil drilling stakeholders! We have laws and they need to be enforced!
    19 Feb 2014, 01:24 PM Reply Like
  • eXit11
    , contributor
    Comments (589) | Send Message
     
    Come again?
    19 Feb 2014, 03:20 PM Reply Like
  • User 16964642
    , contributor
    Comment (1) | Send Message
     
    d1ringer...you don't know what you are talking about. It's the Government's rejection of our American workers by allowing Korea to bring material they don't have a market for in their country and sell it for rock-bottom prices in our country. US Steel went to Obama to plead their case but I guess he does want the American manufacturing and those at home here that support the oil industry to go bust for the sake of a foreign country. Look for massive layoffs and possible bankruptcies if no duties are accessed to the one country that has surpassed the levels that China had prior to their antidumping trade case defeat. Unemployment coffers will be rising soon as there is no way they can make it, ship it over seas, store it and then finish it for $150-$200 less than making it right here in the US.
    20 Feb 2014, 02:57 PM Reply Like
  • d1ringer
    , contributor
    Comments (15) | Send Message
     
    User 16964642...You obviously don't know how to read. That was exactly what I was expressing in my comments. I work at the largest domestic steel producer in the US. I know what is going on with imports, duties, dumping, etc. It's my livelihood that's at stake with these issues, but obviously NOT YOURS! The link is from an article that an investor made in an article. His remarks are in quotation marks in my comment. He is nothing but a leach that sucks money from the American worker. He obviously believes in buying steel or any other product from the lowest bidder no matter if it damages our industries or not.
    4 Nov 2014, 10:04 AM Reply Like
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