After A Lot Of Pain, Can ArcelorMittal Deliver Some Gains?
Stephen Simpson, CFA
Stephen Simpson, CFA
Mon, Jun. 13, 9:19 AM
Wed, Jun. 8, 10:18 AM
- AK Steel (AKS +10.5%) surges more than 10% as Credit Suisse upgrades shares to Outperform from Neutral with a $7 price target, doubled from $3.50, after the firm increases its U.S. steel price deck.
- Credit Suisse says it remains "very bullish" on the U.S. steel industry, and its new supply/demand model for the U.S. flat rolled market indicates continued deficits for value add sheet into Q3, supporting prices well above fair value levels.
- The firm raises its price targets on all steel stocks in its coverage universe except Commercial Metals (CMC +1.9%), owing to rebar spread risks.
- Steel stocks (SLX +2.8%) are broadly higher in early trading: X +6.8%, MT +3.9%, STLD +3.8%, NUE +2.4%, WOR +1.5%, ZEUS +1.4%.
Mon, Jun. 6, 11:58 AM
- Steel stocks (SLX +2.1%) are higher as U.S. Treasury Secretary Lew blames China for flooding low-cost steel into the U.S. and other markets.
- Lew is urging China to cut excess steel production, as the two countries open high-level talks overshadowed by tension over the South China Sea.
- "The Chinese government is... engaged in economic warfare against the U.S. and sadly, they are winning,” Nucor (NUE +0.3%) CEO John Ferriola says in a WSJ interview, adding that China two months ago set a new production record after spending two years promising to cut production.
- Steel producers are mostly higher: X +2.9%, MT +2.1%, CLF +2.8%, AKS -1%, STLD +0.3%, RS +0.4%.
Fri, Jun. 3, 5:43 PM
- ArcelorMittal (NYSE:MT) climbed 3.3% in today's trade following reports that the steelmaker is seeking support in its bid for the biggest steel plant in Europe.
- Reuters reports that MT has asked Cassa Depositi e Presiti, Italy's state-run bank, to support its offer for the troubled Ilva steel plant, which was taken over by the government last year.
- Earlier this week, the Italian government extended to June 30 the deadline for presentation of binding offers for the plant and said it would take four months to assess environmental aspects of the bids.
- MT, along with its Italian partner Marcegaglia, is one of three bidders for the steel plant, the largest in Europe based on production capacity.
Thu, Jun. 2, 2:43 PM
- ArcelorMittal (MT +3.5%) says it is suspending a major expansion of its Mont-Wright iron ore mine in Quebec that would have extended the mine's lifespan by 15 years to 2045, citing weak market conditions.
- MT, which employs ~2.5K workers at the mine, says it informed the United Steelworkers union this week that it will not start expansion work in June as planned.
- The company says its decision was based on the project cost, "fairly high" mine production costs, low iron ore prices and global competition.
- Champion Iron (OTCPK:CHPRF), which will decide on a plan to restart its nearby Bloom Lake iron ore mine by year-end, believes it will benefit from the decision, saying that MT customers eventually will need to replace production and that the Quebec government will want to keep supporting development at Bloom Lake.
Thu, Jun. 2, 10:35 AM
- Iron ore has lost nearly all of 2016's gains, as ore with 62% content fell another 0.5% to $48.18/dry metric ton after posting the biggest monthly loss in about five years in May, which has left prices that topped $70 in April less than $5 above 2015’s year-end level.
- Inventories at China’s ports rose to 100.65M tons last week, the highest since December 2014,and holdings have expanded for eight of the past nine months, just ahead of the period when steel demand usually sees a seasonal slowdown.
- “Demand remains weak and supply is still increasing. There’s a good chance prices will end the year lower,” Shenhua Futures analyst Wu Zhili tells Bloomberg.
- Relevant tickers: VALE, BHP, RIO, MT, CLF, TCK
- Now read Goldman sees iron ore headed back to $35 as glut returns
Thu, May 26, 9:18 AM| Thu, May 26, 9:18 AM | 1 Comment
Thu, May 26, 8:08 AM
- ArcelorMittal (NYSE:MT) +9.1% premarket on speculation that the European Commission may extend its anti-dumping investigation on imports of hot-rolled coil to more countries.
- The commission is looking into whether Chinese exporters of hot-rolled coil received trade-distorting government aid as well as whether Chinese exporters sold the type of steel in the EU below cost.
- RBC Capital says the European Steel Association has petitioned the EC to widen its investigation beyond China to include Turkey, Russia, Brazil, Iran and Ukraine, and that MT would benefit the most from a wider EU trade case.
- Now read ArcelorMittal is a buy
Fri, May 20, 5:39 PM
Thu, May 19, 5:37 PM
Wed, May 18, 5:09 AM
- The United States has ramped up import duties on Chinese steel makers by 522%, accusing Beijing of anti-competitive behavior by selling steel below cost.
- Last year, U.S. Steel (NYSE:X), AK Steel (NYSE:AKS), ArcelorMittal (NYSE:MT), Nucor (NYSE:NUE) and Steel Dynamics (NASDAQ:STLD), all filed a complaint to the International Trade Commission, alleging foreign companies were selling steel at unfairly low prices.
- The industry claims it has had to lay off 12K workers as a result of unfair competition.
- ETFs: SLX
Tue, May 17, 5:43 PM
- May has been rough for stocks of steel companies, but Cowen analysts say investors should be cautious before buying the dip.
- The firm thinks the spike in prices for Chinese hot rolled coil and iron ore will not last long, and that ongoing efforts to contain the HRC dumping experienced since 2014 may have little impact in the U.S. should the Chinese ship products to another country, which then in turn displaces product to the U.S., resulting in increased supply driving prices lower.
- The firm rates U.S. Steel (NYSE:X), AK Steel (NYSE:AKS), Nucor (NYSE:NUE) and ArcelorMittal (NYSE:MT) at Market Perform, with Steel Dynamics (NASDAQ:STLD) and Reliance Steel (NYSE:RS) at Outperform.
- Separately, the U.S. today set final anti-dumping duties of 265.79% on imports of cold-rolled flat steel from China and 71.35% on imports from Japan.
Thu, May 12, 5:17 PM
- U.S. Steel (NYSE:X) tumbled 10.4% and AK Steel (NYSE:AKS) sank 5.4% in today's trade as analysts say more attractive prices for U.S. steel and falling Chinese prices likely will raise the appeal of targeting the U.S. market even after import tariffs were introduced in recent months for some products.
- "A boat load of imports are likely on the way,” says Axiom Capital's Gordon Johnson as he reiterates a Sell rating $5 year-end stock price target for U.S. Steel.
- U.S. Steel has jumped 85% YTD for its best year in more than a decade, but investors now are spooked by fears that steel prices will follow falling prices for raw materials such as iron ore, says BMO Capital analyst David Gagliano.
- Also today: MT -4%, NUE -0.3%, RS -0.3%, STLD -1.4%, TX -0.4%, WOR -0.5%, GGB -4.3%, CLF -6.9%.
Wed, May 11, 3:55 PM
- ArcelorMittal (MT -0.3%) offers to buy back its most expensive bonds, tendering for $1.5B of 9.85% securities due June 2019; the notes have the highest coupons among the company’s outstanding fixed-rate bonds, according to Bloomberg.
- MT is making its second offer to buy back debt in about a month after an April tender for short-dated notes generated little interest, but some analysts say current weakness in high-yield metals bonds should spark more investor interest this time.
- MT is seeking to cut borrowing costs as competition from China weighs on global prices.
Fri, May 6, 12:58 PM
- Iron ore prices wrapped up their biggest weekly loss in four years after China dampened speculation in raw materials trading and concerns rose about whether a recent improvement in Chinese demand will be sustained.
- Ore with 62% content delivered to Qingdao fell 3.3% to $58.29/metric ton today, taking this week drop to 12%, the most since October 2011.
- Iron ore is retreating from April's 15-month high as regulatory authorities and exchanges in China team up to stem a record spike in speculation of commodities, including iron ore and steel.
- Also, inventories held at ports across China rose 1.4% this week to 99.85M tons and have expanded 7.3% this year, indicating that demand may be slipping.
- Relevant tickers: BHP, RIO, VALE, MT, TCK, CLF
- Now read ArcelorMittal says steel markets are stabilizing
Fri, May 6, 11:47 AM
- ArcelorMittal (MT -0.2%) says U.S. and European steel markets are stabilizing (NYSEARCA:SLX), helped by a modest improvement in prospects for China, although the steelmaker maintained its 2016 guidance for core earnings of above $4.5B (Q1 earnings).
- MT says it still sees global steel consumption, which includes changes to inventories, to be flat to up 0.5% this year, but it raises its forecast for Chinese consumption to between flat and down 1% from a previous outlook for a drop of 0.5%-1.5%.
- J.P. Morgan analysts say "the fact that the company is unwilling to raise the bottom of its guidance range implies either a lack of confidence... or that cost savings are not coming through as quickly as we had envisaged."
- Now read Buy ArcelorMittal, value stock and turnaround story
ArcelorMittal SA is engaged in steelmaking and mining activities. It operates through the following segments: NAFTA, Europe, Brazil, ACIS and Mining. The NAFTA segment produces flat products such as slabs, hot-rolled coil, cold-rolled coil, coated steel and plate. It produces long products such... More
Sector: Basic Materials
Industry: Steel & Iron