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Feb. 13, 2015, 6:21 AM
- ArcelorMittal (NYSE:MT) warned this morning of lower profits in 2015 but surprised the market by managing to cut its debt to the lowest level since the company was created in 2006.
- The steelmaker said it expects core profits to drop to between $6.5B-$7B in 2015, from $7.2B in 2014, as dwindling prices of iron ore dent a recovery in steel demand.
- Despite a 5% decline in Q4 profit, ArcelorMittal posted a $1.1B net loss for 2014, an improvement on a $2.5B net loss a year ago.
- MT +1.9% premarket
Feb. 12, 2015, 5:30 PM
Feb. 3, 2015, 6:58 PM
- Cliffs Natural Resources (NYSE:CLF) plans to join steelmakers in filing complaints over steel imported into the U.S., CEO Lourenco Goncalves says, a move that could raise pressure on the U.S. government to add more tariffs on steel products.
- CLF has been restructuring to focus on five profitable iron ore mines in Minnesota and Michigan that sell exclusively to U.S. Steel (NYSE:X), ArcelorMittal (NYSE:MT) and other steelmakers with U.S. mills, and those mines are now vulnerable to the sudden slide in steel prices.
- Goncalves blames the "avalanche of imports" for collapsing steel prices, not falling oil prices, even though energy companies have been canceling orders for steel pipe as they cut back on new projects.
Jan. 26, 2015, 6:10 PM
- U.S. Steel (NYSE:X) says it will temporarily curtail operations at two plants in Alabama and one in Texas that sell steel pipes and tubular products to oil and gas drillers, potentially affecting more than 1,900 workers.
- Earlier this month, U.S. Steel said it would idle plants in Ohio and Texas, and possibly lay off up to 756 workers.
- The fall in oil prices could decimate an entire industry that has been built up in recent years to supply drilling in places such as the Marcellus Shale and the Gulf of Mexico; “There’s still millions of tons of capacity set to come online, and it’s just going to be too much," says one analyst.
- Other steelmakers with key U.S. operations include NUE, STLD, MT and AKS.
Jan. 23, 2015, 11:18 AM
- Iron ore miners are broadly lower after Goldman Sachs becomes the latest global bank to deliver a dismal outlook for the steel-making ingredient, forecasting an average price of $66/metric ton this year from an earlier estimate of $80.
- Goldman is at least the fifth bank this month to lower estimates, citing rising seaborne supplies and weaker demand growth from China; just last week, Citigroup cut its iron ore forecast to $58 in 2015, down from its earlier $65, and UBS lowered its target to $66 from $85.
- Low-cost expansions likely will continue as major producers are still mining iron ore at a profit, which would expand the global seaborne surplus from 47M tons this year to 260M tons by 2018, Goldman says.
- Iron ore miners: VALE -8%, BHP -3%, RIO -3.6%, CLF -7.6%.
- Copper miners: FCX -2.6%, SCCO -2.4%, TCK -2.6%.
- Steel companies: X -6.3%, MT -7.1%, AKS -3.2%, NUE -1.2%, STLD -3%, CMC -3.8%, TMST -2.4%.
- Earlier: Goldman gives in on mined commodities
Jan. 23, 2015, 9:11 AM
Jan. 20, 2015, 12:59 PM
- ArcelorMittal (MT +2.5%) says it is selling its interest in the Kuzbass coal mines in Siberia to Russia's National Fuel Company, part of its strategic decision to source coal from Kazakhstan for steel operations in Ukraine.
- Financial terms were not disclosed, but MT bought the two mines from Russian steel producer Severstal for $652M in 2008, when they produced a combined 1.8M metric tons/year of concentrate; production fell to 677K metric tons in 2013.
Jan. 14, 2015, 12:39 PM
- Citi cuts price targets for iron ore to $58 for 2015 and $62 for 2016, down from its prior estimates of $65 for both years, and lowers its outlook for thermal and met coal.
- Citi warns its downwardly revised forecast means it now expects earnings for major mining companies will fall by 9%-21% for 2015 and by 3%-16% in 2016.
- Rio Tinto (RIO -2.5%) is the exception, as Citi sees earnings rising 7.1% this year and 10.6% next year due to the company’s greater exposure to the weaker Australian dollar.
- The firm cuts its price target for Glencore (OTCPK:GLCNF -7.2%) by 8% to £3.60 from £3.90 and sees earnings falling 21% and 16% respectively in 2015 and 2016.
- Citi says it is still bullish on the sector, but warns that metals and mining companies will only slowly grind higher over the next few years.
- Also: BHP -4.5%, VALE -5%, FCX -12%, SCCO -4.9%, TCK -9.7%, CLF -4.4%, CENX -9.1%, MT -4.2%, X -4.9%, NUE -3.4%, STLD -2.6%, BTU -9.8%, ANR -8.8%, ACI -8.9%.
Dec. 5, 2014, 2:36 PM
- U.S. Steel (X +0.7%) depends on U.S. oil producers for a big chunk of its profits, prompting some analyst warnings of potential trouble ahead for the company.
- Axiom Capital's Gordon Johnson, for one, says that when oil prices in 2009 were at today's levels, U.S. Steel’s tubular business saw a contraction in overall rig counts and began generating negative operating margins.
- Morgan Stanley’s Evan Kurtz, however, sees upside for Steel Dynamics (STLD +0.2%) as consensus begins to incorporate lower scrap costs.
- Also: MT +0.6%, AKS -0.7%, NUE -0.7%,
Nov. 19, 2014, 12:26 PM
- Iron ore prices extend their historic decline, approaching $70/dry ton in a retreat to the lowest level in more than five years, as analysts rule out any Chinese restocking that typically supports prices towards the end of each year.
- The price is now at a level at which all but the three biggest low-cost producers - Rio Tinto (RIO -2.4%), BHP Billiton (BHP -3%) and Fortescue (OTCPK:FSUMF -8.8%) - are either generating losses or are struggling to break even.
- Steel stocks also are getting whacked: SCHN -5.4%, X -4%, PKX -3%, AKS -3%, CMC -2.7%, STLD -2.5%, NUE -1.6%, MT -1.3%.
Nov. 18, 2014, 5:24 PM
- The Ebola epidemic in west Africa has led mining companies in the region to put expansion plans on hold, delaying the rollout of jobs meant for residents of the countries hardest hit by the virus.
- ArcelorMittal (NYSE:MT) has delayed a $1.7B expansion at its iron ore mine in Liberia, Rio Tinto (NYSE:RIO) has stopped work on a $20B iron ore mine in Guinea, and Sierra Leone-focused London Mining filed for bankruptcy last month after falling iron ore prices and Ebola concerns hampered its ability to attract financing.
- It wasn’t supposed to be like this: Guinea holds two-thirds of the world’s bauxite reserves as well as massive iron ore deposits, while Liberia and Sierra Leone boast troves of diamonds, gold and iron ore.
- Officials worry the pullback could set development back by a decade in a region that only recently escaped a cycle of war and political turmoil.
Nov. 14, 2014, 2:57 PM
- The Commerce Department confirms steep duties on imports of carbon and alloy steel wire rod from China after ruling the products were being sold below cost in the U.S. market and received unfair levels of government subsidies.
- The complaint about the imports from China, which totaled $313M in 2013, was made by Nucor (NUE +0.9%), ArcelorMittal (MT +2%) and others.
- The U.S. International Trade Commission will make its final decision by Dec. 26 on whether duties go ahead.
Nov. 7, 2014, 7:39 AM
- ArcelorMittal (NYSE:MT) +2% premarket after reporting Q3 operating earnings doubled on improved European operations and higher steel volumes, despite a decline in iron ore prices.
- Q3 revenues rose 2.2% Y/Y to $20.1B, while EBITDA jumped 11% to $1.91B, beating analysts’ expectations of $1.81B.
- Q3 operating income for Europe was $166M, the third consecutive quarter of profit in the region after six straight quarters of losses.
- Steel shipments totaled 21.5M tons, up 3.9% Y/Y, while iron ore shipments were 10M tons, up 6.3%.
- Says it expects full-year EBITDA will exceed $7B as the negative impact of declining iron ore prices on mining profitability is being offset by an improvement in the steel business.
Nov. 7, 2014, 5:03 AM
- ArcelorMittal (NYSE:MT): Q3 Net Income of $22M
- Revenue of $20.06B (+2.1% Y/Y) misses by $310M.
Nov. 6, 2014, 5:30 PM
Oct. 21, 2014, 12:34 PM
- The U.S. says it will terminate a 15-year-old deal sheltering Russian flat-rolled steel producers from high import duties, and anti-dumping duties will apply beginning Dec. 16.
- U.S. steel producers, including U.S. Steel (X +5%) and Nucor (NUE +2.2%), complained to the Commerce Department in July that the reference price set in a 1999 agreement, which also set a cap on imports, had been below U.S. market prices since 2004.
- However, J.P. Morgan analysts see no reason for buying steel stocks (NYSEARCA:SLX), saying the move impacts only 1.4% of U.S. market share; in fact, the firm suggests shorting steel stocks on the "misinterpretation" of duties on Russian imports of hot rolled steel.
- Other steels also are higher: AKS +3.9%, MT +3.6%, CMC +2.3%, STLD +1.7%.
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