Tue, Nov. 24, 9:14 AM
- U.S. Steel (NYSE:X) -3.8% premarket after BofA Merrill Lynch cuts its stock price target to $3 from $7 and says it has concerns about the company's liquidity.
- The firm also cuts its estimated 2016 hot rolled coil forecast to an average $455/short ton from $475.
- Yesterday the company announced the idling of operations at its Granite City, Ill., plant.
- Also, AK Steel (NYSE:AKS) -4.3% premarket.
Tue, Nov. 10, 2:21 PM
- Trade cases will not be enough to lift prices and margins for steel companies such as U.S. Steel (X +1%) and AK Steel (AKS +2.9%), Barclays analysts believe.
- "The just-determined duties are a good step... and the trend in trade protections by other countries is an effective pushback, but the mills’ strategy has to be bigger and more proactive in response to what will likely remain a persistent environment of global oversupply," Barclays says.
- The firm says the most likely outcome over the next several months appears to be a modest emergence from the trough, with Steel Dynamics (STLD -1.3%) and Nucor (NUE -0.4%) best positioned to emerge relatively stronger.
Wed, Nov. 4, 3:48 PM
- Steel company shares are sliding after U.S. Steel (X -14.3%) reported weaker than expected Q3 results and warned of sharply lower shipments and realized prices for 2015 than it previously projected.
- The company drastically reduced its full year adjusted EBITDA guidance to $225M from an earlier forecast for $700M-$900M, and said commercial markets are not improving as management had expected; steel selling prices reversed direction in Q3 as excessively high levels of imports and lower steel scrap prices caused spot prices to reach new lows for the year.
- Deutsche Bank downgrades the stock to Hold from Buy, citing the Q3 miss and dreary outlook.
- Also: AKS -4.2%, CLF -2.2%, NUE -1.6%, CMC -1.2%, STLD -0.9%, RS -0.3%.
Tue, Nov. 3, 4:45 PM
- The U.S. set preliminary import duties on corrosion-resistant steel products from China, India, Italy and South Korea, but they are not nearly as heavy as many observers had expected, and steel company stocks (NYSEARCA:SLX) initially fell after the announcement at ~3:00.
- While the preliminary duties on China are high, as expected, duties on Korea and Italy were "much smaller than expected," while there were no duties for Taiwan, which industry followers consider “disappointing," according to Axiom Capital's Gordon Johnson.
- Axiom sees the news as a slight loss for U.S. steel industry participants, as it suggests incremental duties on outstanding trade cases will focus on China, with little emphasis on other countries China can easily use as an intermediary to get steel into the U.S.
- X +0.6% in regular trading but -8.1% AH; AKS -2.9% in regular trading and -2.4% AH.
- Also, in regular trading: CLF +7.3%, JOY +0.7%, CAT +0.5%, NUE -0.3%, CMC -0.4%, RS -1.8%.
Mon, Oct. 26, 11:49 AM
- AK Steel (AKS -9.9%) plunges ~10% after BofA/Merrill downgrades shares to Underperform from Neutral with a $1 price target, slashed from $4, saying this year's sharp drop in steel prices does not appear to be fully reflected in consensus steel mill estimates, which likely will lead to disappointing guidance from AKS and U.S. Steel (X -5.9%).
- Based on the firm's forecast for lower steel prices, BofA expects AKS to lose $0.65/share in 2016, down from a prior $0.30 EPS and below the consensus estimate of a $0.10 loss; the firm also is concerned over AKS's tight cash flow position amid steep net debt and 2016 estimated EBITDA of 7.5x.
- BofA also cites AKS's fragile but improved free cash flow story, as estimated 2015 project spending falls sharply; the firm says AKS benefits from lower iron ore prices yet still relies on somewhat rigid contracts with Cliffs Natural Resources (CLF -1.5%) for more than half of its needs.
- Also: NUE -1.8%, RS -1.4%, STLD -1.3%.
Mon, Oct. 19, 2:27 PM
- There's plenty more pain ahead for steel stocks such as AK Steel (AKS -6.1%), U.S. Steel (X -3%), Steel Dynamics (STLD -4.7%), Nucor (NUE -2.8%) and ArcelorMittal (MT -4.3%), according to Cowen analyst Anthony Rizzuto.
- Prices for hot rolled coil likely need to reach the upper $400s/ton for integrated producers to return to profitability, and negative sentiment is at extreme levels, but Rizzuto says recent capacity closures and upcoming preliminary trade case determinations may serve as a catalyst for near-term price stabilization.
- Shares of steel stocks (SLX -3.9%) are all trading sharply lower after China's Q3 GDP showed the slowest annual rate of growth (+6.9%) since the financial crisis in 2009.
Fri, Oct. 16, 2:52 PM
- AK Steel (AKS -1.5%) says it will temporarily idle the blast furnace and related steelmaking operations at its Ashland Works facility in Kentucky, laying off as many as 733 workers before year-end.
- AKS cites "unfairly traded imports of carbon steel that have been flooding our shores," which have cut order intake rates, production rates, shipment volumes and selling prices.
- AKS says it does not intend to idle the hot-dip galvanizing line at Ashland Works that primarily services automotive customers.
- SunCoke Energy (SXC -6.1%), which supplies coke to AKS' Ashland and Dearborn blast furnace operations under a long-term contract, says it expects AKS to continue to honor its contract.
Fri, Sep. 25, 12:59 PM
- The U.S. International Trade Commission says it finds a reasonable indication that U.S producers are harmed by imports of flat hot-rolled steel products from seven countries, advancing a process that could result in import duties.
- AK Steel (AKS -5.5%), ArcelorMittal (MT -4.7%), Nucor (NUE -0.6%), U.S. Steel (X -4.8%) and Steel Dynamics (STLD -1.4%) have complained the imported goods are being sold too cheaply or have benefited from unfair government subsidies.
- AKS, for one, issues a statement praising the ITC ruling.
Fri, Sep. 18, 9:15 AM
Thu, Sep. 17, 5:37 PM
Thu, Sep. 17, 4:58 PM
- AK Steel (NYSE:AKS) +9.2% AH after issuing a better than expected Q3 outlook, now seeing a loss of $0.02-$0.07/share vs. a $0.36/share loss in Q2 and the analyst consensus estimated loss of $0.24.
- AKS says it expects positive financial effects of higher shipments, lower raw material costs, cost reduction efforts and higher operating rates will partially offset lingering low carbon steel spot market prices.
- AKS sees Q3 shipments of ~1.86M, up ~3% Q/Q, primarily related to increased shipments to the automotive market.
- Expects an average Q3 selling price of ~$910/ton, ~2% lower than Q2, because of lower carbon steel spot market pricing, which the company believes is driven mostly by high levels of unfairly traded foreign steel imports.
Thu, Sep. 10, 3:43 PM
- Investors expecting a V-shaped recovery in steel prices and volumes are likely to be disappointed, BB&T analysts say in initiating U.S. Steel (X -2.1%) and AK Steel (AKS -0.2%) with Hold ratings.
- The firm thinks 2015 represents trough earnings for U.S. Steel, but the ability to generate mid cycle-type earnings is largely dependent on macro factors beyond the company's control; also, while flat rolled and tubular results are close to an inflection point, the firm does not see shipments or pricing returning to 2013-14 levels for the foreseeable future.
- Consensus estimates for AKS appear high, the firm says, expressing concern about the company’s ability to delever its balance sheet, which likely would require an unexpectedly significant improvement in steel fundamentals.
Tue, Aug. 11, 11:35 AM
- Commodity metals are getting hammered by China's devaluation, with aluminum trading down nearly 2%, copper prices lower by 2.5% and nickel plunging more than 3.5%.
- Hardest hit of the mining stocks is Freeport McMoRan (FCX -14.1%), which has completely surrendered yesterday's 10.8% surge; shares now are down 72% over the past year and 57% YTD.
- Iron ore miners are sharply lower: BHP -5.5%, RIO -4.2%, VALE -7.8%, CLF -7.3%.
- Steel companies: X -9.7%, MT -5.1%, AKS -5.7%, NUE -2.9%, STLD -3.5%, CMC -4%.
- Also: AA -6%, CENX -4.9%, TCK -8.2%, SCCO -4.9%.
- ETFs: XLB, JJC, XME, SLX, PEO, VAW, COPX, DBB, UYM, CU, IYM, JJN, SMN, JJU, PICK, MATL, CPER, JJT, BOM, RJZ, FXZ, PYZ, BOS, FOIL, JJM, LD, BDD
Thu, Jul. 30, 10:34 AM
- AK Steel (AKS +2.6%) is upgraded to Overweight from Neutral with a $5 price target at J.P. Morgan, which believes fundamentals for domestic integrated steel makers have bottomed.
- Steel prices likely have recently hit bottom, and falling imports coupled with stable demand should push steel prices higher throughout the end of the year, the firm says, adding that AK’s Q2 results instead of its Q3 should represent a low for the current cycle.
- While the macro environment remains negative due to the strong dollar, a weaker Chinese economy and weak oil prices, lower imports should push steel prices, and AK’s earnings and stock price higher in the near term, the firm says.
- JPM expects hot-rolled prices to increase to the low $500/ton area by year-end as the import situation sees some improvement and demand remains stable; trade cases should help to reduce imports into the U.S., which in any case is no longer as attractive of a destination for exports given current prices.
Tue, Jul. 28, 2:25 PM
- AK Steel (AKS +13.5%) soars despite a mixed Q2 earnings report, after joining domestic steel producers U.S. Steel (X +5%), Nucor (NUE +2.2%), Steel Dynamics (STLD +6.9%) and Arcelor Mittal (MT +5.4%) in filing a trade case against steel dumping by eight countries related to cold-rolled steel products.
- The news apparently made investors optimistic that AKS can overcome low steel prices, which caused the company to miss Wall Street’s EBITDA forecasts.
- KeyBanc analyst Philip Gibbs notes that based on comments on the AKS earnings conference call, hot-rolled and stainless steel trade cases look likely.
- AKS says Q2 shipments totaled 1.811M tons vs. 1.75M in Q1 and 1.39M in Q2 2014, and expects to generate improved results for Q3 and H2 relative to their comparable periods a year ago, citing anticipated higher shipments, improving carbon steel spot market prices, increased production levels resulting in lower per ton operating costs, and the continuing benefit of lower raw materials costs, particularly iron ore.
- Citi analysts believe AKS likely will continue to struggle to post positive free cash flow absent a sharp price recovery.
Tue, Jul. 21, 11:53 AM
- Steel stocks are higher after Steel Dynamics (STLD +6.8%) issues solid Q2 earnings and says it expects improved financial results in H2 driven by reduced steel import volumes and sustained lower scrap costs.
- STLD says it generated $309M in cash flow from operations during Q2, a 32% Q/Q increase.
- Still, Citigroup’s Brian Yu thinks STLD's results hint at tough times for AK Steel (AKS +3%) and U.S. Steel (X +2.1%); with utilization rates at 87% in Q2 vs. the 72% industry average, STLD may have been more aggressive taking share in the quarter, which along with lower engineered bar shipments, could help explain the drop in realized mills pricing and margins.
- Longbow’s David MacGregor argues that "trade cases are the [steel] market’s only hope now."
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