- Despite his expectation of continued low steel prices, Clarkson Capital's Lee McMillan launches coverage on several steel makers with Buy recommendations for Arcelor Mittal (MT +5.2%), AK Steel (AKS +4.6%) and Nucor (NUE +0.7%) based on their exposure to the U.S. automotive and construction industries.
- Steel makers that rely on the oil and gas industry, which typically accounts for 10% of U.S. steel demand, likely will be in a rut for a while; U.S. Steel (X +3.9%) ranks a Sell rating for its high fixed costs and reliance on the U.S. energy sector, McMillan says.
- Rated Hold are Commercial Metals (CMC +0.8%), Reliance Steel (RS -1.9%) and Steel Dynamics (STLD +1.9%).
- U.S. steel producers are likely to file dumping charges against China following the release of their Q1 results, but imports will continue to depress U.S. steel prices, the analyst predicts.