U.S. Steel "among the best shorts in the market," Axiom analyst says

|By:, SA News Editor

U.S. Steel (X -3.2%) has shed 17% YTD, but Axiom Capital’s Gordon Johnson thinks there's more downside to go, calling U.S. Steel “among the best shorts in the market today."

Given that U.S. hot-rolled coil steel spot prices are sitting at a premium of greater than $200/metric ton to Chinese spot prices, and Chinese exports of steel are at multi-year highs, Axiom notes that whenever the spread between U.S. HRC spot and Chinese HRC spot has opened up to similar levels, U.S. HRC spot prices have collapsed down to the Chinese level within a few months.