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Jun. 1, 2015, 10:41 AM| Jun. 1, 2015, 10:41 AM | 1 Comment
May 12, 2015, 3:42 PM
- Apollo Global Management (NYSE:APO) is leading the creditor group seeking to take control of Magnetation after the iron ore producer that filed for bankruptcy last week, Bloomberg reports.
- APO increased its share of the company’s bonds after AK Steel (NYSE:AKS) pulled the plug on the joint venture last month, taking a $256M impairment charge on its 49.9% stake following a plunge in iron ore prices and citing Magnetation’s inability to access more capital.
- The secured creditors will get 75% of new common stock, 90% new convertible preferred stock and $235.5M in second-lien notes.
May 11, 2015, 12:59 PM
- AK Steel (AKS +3.8%) is reiterated with a Buy rating and $9 price target at BofA Merrill, based on better global electrical steel demand, falling iron ore costs and an improving free cash flow story as estimated 2015 project spending tapers off.
- BofA says its meeting with CFO Roger Newport revealed optimism that the recent $20/ton price hike was sticking and more could follow.
- The firm also says AKS is the only beneficiary of lower iron ore prices in its coverage universe, as even with its Magnetation investment the company will still rely on third party iron ore for half its needs.
Apr. 28, 2015, 10:48 AM
- AK Steel (AKS +7.2%) surges higher despite posting a wider than expected Q1 loss, as revenues rose 27% Y/Y to $1.75B.
- Shipments surged 39% Y/Y to 1.75M tons, helped by a boost from an acquisition and strong demand from the automotive sector, but fell 13% from Q4 shipments of ~2M tons; average selling prices fell 8.9% Y/Y.
- AKS took a $256M writedown related to its investment in iron ore pellet joint venture Magnetation LLC, citing near-term liquidity issues caused primarily by a recent significant decline in global iron ore pellet pricing.
- AKS had warned last month that it would post a Q1 loss, with a 14% Q/Q decline in shipments to ~1.73M tons, due to high levels of steel imports.
Apr. 28, 2015, 9:15 AM
- The EU will impose anti-dumping duties next month on imports of grain-oriented electrical steel from five countries, Reuters reports, citing sources familiar with a European Commission proposal.
- The Commission plans to set tariffs of as much as 35.9% for Japanese imports of grain-oriented electrical steel following a complaint lodged last year by the European steel producers association, Eurofer.
- Duties also will cover imports from China (28.7%), Korea (22.8%), the U.S. (22%) and Russia (21.6%).
- Grain-oriented electrical steel is a highly-specialized product used by power producers and distributors to produce transformer cores and is made by only 16 producers worldwide, including ArcelorMittal (NYSE:MT) and ThyssenKrupp (OTCPK:TYEKF) in Europe, Posco (NYSE:PKX) in Korea, and AK Steel (NYSE:AKS) in the U.S.
Apr. 28, 2015, 8:33 AM
- AK Steel (NYSE:AKS): Q1 EPS of -$0.28 misses by $0.03.
- Revenue of $1.75B (+26.8% Y/Y) beats by $10M.
Apr. 27, 2015, 5:30 PM
- AET, AGCO, AIXG, AKS, ALLY, AMG, AUDC, AUO, AXE, BMY, BP, BSX, CARB, CAS, CBR, CIT, CMI, CNC, CNX, COH, CPLA, CRY, DFRG, DORM, ECL, ENTG, ETR, F, FBC, FDP, FLWS, FMER, GAS, GLW, GPI, HMC, HSP, ICLR, IDXX, IIVI, IPGP, IPI, JBLU, JEC, LRN, LXK, MAS, MDXG, MHFI, MRGE, MRK, NCI, NEO, NOV, OFC, OSK, PAG, PFE, PH, PHG, POR, SALT, SC, SIR, SIRI, ST, SVU, TMUS, TXT, UBSI, UPS, UTHR, VDSI, VLO, WAT, WDR, WHR, WWW, WYN, XRS, YNDX
Apr. 23, 2015, 3:49 PM
- Steel companies are higher after Nucor (NUE +3.5%) reported Q1 earnings that exceeded analyst estimates and came in above the company's own earlier guidance of $0.10-$0.15.
- NUE says overall Q1 operating performance at its steel mills segment fell significantly Q/Q, as expected, primarily due to lower selling prices and margins resulting from the high level of steel imports flooding the domestic market, which the company says accounted for 33% of the finished steel market in the quarter.
- NUE reports shipments to outside customers declined 9% and average selling prices dropped 5% during the quarter.
- NUE says its automotive markets remained strong in Q1, and continues to see improving demand in non-residential construction markets; it expects Q2 earnings will improve Q/Q with steel mill margins likely to increase but remaining under pressure because selling prices have not fully stabilized and imports remain high.
- Related tickers: X +4.5%, AKS +6.7%, MT +4.9%, RS +9.5%, STLD +3.5%, WOR +2%, CMC +2.7%.
Apr. 14, 2015, 3:23 PM
- 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.
Mar. 31, 2015, 10:16 AM
- J.P. Morgan tells clients to short U.S. Steel (X -2.7%), expecting the company to operate at a loss this year.
- JPM cuts its estimated FY 2015 EPS for the company to a loss of $0.25 from its earlier outlook for a $1.57 gain, and sees FY 2016 EPS of $1.42 vs. its earlier view for $3.00.
- The firm believes a strong dollar, weak oil prices and slowing growth in China will weigh on metals demand.
- Also: AKS -3.6%, NUE -1.3%, STLD -2.1%, WOR -3%, CLF -3.9%, CMC -1.8%, TMST -3.9%, SCHN -1.9%.
- Earlier: U.S. Steel to idle Minnesota plant
Mar. 25, 2015, 3:35 PM
- U.S. Steel's (X +1.4%) announcement that it will idle an Illinois plant and lay off more than 2,000 workers is providing a sector-wide boost, as AK Steel (AKS +3.2%) and Steel Dynamics (STLD +1.3%) also enjoy strong gains.
- With hot-rolled coil prices yet to find a bottom and currently at $471/ton, Citi analysts say it makes sense that U.S. Steel would continue to take actions to rationalize production and streamline operations to mitigate costs.
- Perhaps even more important, firing 2K-plus employees likely will be used as further evidence of damage to the U.S. steelmaking industry from high imports flows that were primarily responding to elevated U.S. price premiums, boosting the case for higher tariffs, Citi says.
Mar. 20, 2015, 2:39 PM
- AK Steel (AKS -5.2%) is sharply lower after reporting downside Q1 guidance, citing lower than expected carbon steel spot market shipments and prices due to high levels of what it sees as unfairly traded imports, but most other steel names sport nice gains: X +4.3%, MT +2.9%, NUE +2.8%, STLD +1.9%, WOR +2.5%, CMC +2.3%.
- Various factors but especially the strong dollar are sparking a surge in steel imports, resulting in a tough Q1 for all U.S. steel producers, but most of the companies also say Q2 and H2 2015 should be a bit better as demand is fairly strong in many end markets (Briefing.com).
- NUE said this week that steel mill margins for all products should improve in Q2 as it begins to realize the benefits of lower raw materials costs and selling prices begin to stabilize, while STLD said continued strength in domestic steel consumption from the auto, manufacturing and construction sectors should support a stronger Q2 and H2.
- Credit Suisse analysts prefer US Steel in the group "with the caveat that this is a 1-3 year view."
Mar. 20, 2015, 9:23 AM
Mar. 19, 2015, 5:40 PM
- AK Steel (NYSE:AKS) -7.8% AH after guiding Q1 results below Wall Street expectations, now expecting to report a net Q1 loss of $0.23-$0.28 per share vs. the analyst consensus estimate for a $0.01 loss.
- AKS says Q1 operations have been significantly hurt by lower than expected carbon steel spot market shipments and prices due to unexpectedly high levels of what the company believes are unfairly traded imports; AKS expects Q1 shipments of ~1.73M tons, a 14% Q/Q decline.
- Earlier: Nucor cuts Q1 guidance
- Earlier: Steel Dynamics sees Q1 earnings below consensus
Mar. 19, 2015, 5:37 PM
Mar. 16, 2015, 5:19 PM
- Steel stocks (NYSEARCA:SLX) finished mostly lower after a WSJ weekend report on increasing Chinese steel exports and an analyst note that lowered price targets on the sector.
- WSJ said China's steel exports rose 63% Y/Y to 9.2M tons in January, and that as China's growth slows it is shipping its excess steel overseas, resulting in lower prices and prompting steel producers all over the world to seek government protection.
- Also, Jefferies cut price targets on several sector names after what it sees as a challenging Q1, noted that most of its contacts expect steel prices to trough sometime in Q2, and said it believes mini-mill producers such as Steel Dynamics and Nucor are best positioned in the group.
- In today's trade, X +0.7%, NUE +1.1%, STLD +0.1%, AKS -1.5%, WOR -2.3%, CMC -3%, SCHN -4.7%.
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