VanEck Vectors Steel ETFNYSEARCA
Thu, Oct. 13, 2:33 PM
- Even without the latest gloomy export data from China, shares of U.S. Steel (X -5.5%) might have dropped because of falling steel prices.
- Axiom Capital’s Gordon Johnson says U.S. hot rolled coil steel prices have dropped to $496/ton, below “the psychologically [important] $500 threshold... this is not good for U.S. steel mills.”
- Also: SLX -2.9%, MT -2.3%, AKS -4.2%, STLD -1.9%, RS -1.7%, ATI -3%, WOR -1.6%.
Thu, Sep. 15, 6:53 PM
- Steel prices (NYSEARCA:SLX) likely will continue to move lower through year-end, Jefferies analysts say, citing "incremental weakness in raw material input costs as well as supply-side pressures from ramping capacity" at projects such as ArcelorMittal’s BF restart and Big River.
- Still, while Jefferies lowers price targets on all the stocks in its coverage except three, it awards Buy ratings to Steel Dynamics (NASDAQ:STLD) and Nucor (NYSE:NUE); the firm sees STLD as its the top pick in the sector and NUE as the most defensive, saying the companies boast relatively lower cost operating structures and less levered balance sheets.
- Meanwhile, Hold-rated U.S. Steel (NYSE:X) and AK Steel (NYSE:AKS) are highly sensitive to absolute steel prices and face margin risk from surging coking coal prices, so the shares likely will face the brunt of the downside pressure, Jefferies says.
- Also rated Hold: CMC, ZEUS, RS, RYI, TMST, WOR.
Tue, Sep. 13, 7:41 AM
- The U.S. International Trade Commission affirms most of the recent anti-dumping and anti-subsidy duties on hot-rolled flat steel imports (NYSEARCA:SLX) from Australia, Brazil, Britain, Japan, the Netherlands, South Korea and Turkey.
- Used in automotive applications, construction, tubing and heavy machinery, hot-rolled steel imports from the seven countries more than doubled to nearly $2B last year, with ~$650M coming from South Korea.
- The U.S. Commerce Department yesterday levied anti-dumping and anti-subsidy duties of roughly 64%-77% percent on certain Chinese-made stainless steel sheet and strip products.
Mon, Aug. 22, 6:47 PM
- Citigroup initiated coverage on the steel sector (NYSEARCA:SLX) today with a positive outlook, with Buy ratings on U.S. Steel (NYSE:X) and Steel Dynamics (NASDAQ:STLD), and Neutral ratings for AK Steel (NYSE:AKS), Nucor (NYSE:NUE) and Commercial Metals (NYSE:CMC).
- Citi sees prices for hot-rolled coil holding the $550-$600/ton range into 2017, a relatively more bullish view than the consensus which expects prices to fall quickly in H2 given relatively high price premiums vs. imports, but the firm finds support from idlings, imports and inventory.
- The firm considers US Steel the top pick for near-term upside in the sector, saying the company currently has “the highest operating leverage, highest short interest and most upside to consensus estimates."
- Citi likes STLD as one of the lowest-cost operators in the U.S. and notes that the company has been generating mill EBITDA margins five percent above the industry average over the last five-year and 10-year period.
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%.
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
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
Tue, Apr. 19, 3:39 PM
- Analysts at both Barclays and BofA Merrill Lynch raise their price targets for some steel industry stocks (SLX +4%), seeing industrial activity picking up for this spring and tight domestic supplies and low imports supporting higher steel prices.
- But the firm still expect pricing to come down over H2 as overseas production ramps back up and domestic scrap flows improve.
- Barclays says US Steel (X +4%) and AK Steel (AKS +4.5%) still look expensive but the stocks should benefit in the near term from the momentum driving hot rolled coil pricing; the firm raises its price targets for X to $15 from $7, AKS to $3 from $2, Steel Dynamics (STLD +1.5%) to $27 from $22, and Nucor (NUE +0.9%) to $52 from $47.
- BofA Merrill raises its stock targets for X to $9 from $1, AKS to $2.50 from $1, STLD to $27 from $24, and NUE to $55 from $50.
- However, BofA also downgrades Reliance Steel (RS -0.2%) to Underperform from Neutral, thinking the stock’s strong move has taken its valuation well above its historical EBITDA averages.
- Now read Reuters: China, major producers fail to reach steel deal
Mon, Apr. 18, 5:38 PM
- China and other major steel-producing countries have failed to reach a deal to tackle global steel overcapacity, as the sides argued over the causes and whether China is keeping loss-making producers afloat, Reuters reports.
- China's assistant commerce minister denied that his country subsidizes steel exporters, saying China had cut 90M metric tons of capacity and had plans to reduce it by another 100M-150M, while critics say it would still have a capacity of ~1B metric tons, far in excess of its needs.
- Relevant tickers: SLX, X, AKS, NUE, STLD, MT
- Now read China to scrap some export subsidies, U.S. Trade Rep says
Wed, Mar. 23, 6:48 PM
- Credit Suisse and Deutsche Bank take divergent views on the outlook for global steel prices (NYSEARCA:SLX), with the former expecting prices to rise further over the next few months and the latter predicting that the upward trend probably will not continue.
- Credit Suisse analyst Curt Woodworth sees U.S. steel prices likely continuing to rise through the end of Q2, citing growing demand and other factors including reduced Asian production and U.S. trade restrictions, which should keep a lid on U.S. steel imports.
- Woodworth names U.S. Steel (NYSE:X) and Steel Dynamics (NASDAQ:STLD) as his top picks in the group, as they have the highest leverage to flat rolled steel, which should be helped in 2016 by much higher volumes and continued import restrictions; he raises his stock prices targets for X, STLD and AK Steel (NYSE:AKS) to a respective $22, $27 and $3.50 from $19, $25 and $2.
- However, Deutsche Bank's Jorge Berstain believes the YTD rally in commodity prices will not continue, and cuts his 2016 iron ore price outlook by 4% to $44/ton; he downgrades Nucor (NYSE:NUE) and Reliance Steel (NYSE:RS) to Hold from Buy, and maintains Sell ratings on X and AKS.
- Earlier: Deutsche Bank sees commodity rally fizzling; downgrades ABX, HL, PAAS, CDE
Fri, Mar. 11, 11:39 AM
- Credit Suisse is bullish on the U.S. steel sector (SLX +0.6%), believing the U.S. market seems close to a cyclical low point for volume and pricing, with a very strong outlook for both for the rest of 2016.
- Global prices have surged in recent months, and the firm thinks U.S. prices likely will experience the strongest recovery, increasing with the global market and premiums to foreign material likely expanding from trade case protection.
- Credit Suisse initiates U.S. Steel (X +1.8%) with an Outperform rating, expecting the company to generate high incremental margins as volume recovers and seeing 2016 free cash flow and EBITDA beating expectations; X also has the highest leverage to spot market recovery, the firm says.
- However, the firm rates AK Steel (AKS -4.5%) at Underperform, citing the high fixed cost base and Ashland outage as major headwinds; it expects AKS to burn cash at a rate of $43M in 2016 and $109M in 2017.
- Steel Dynamics (STLD +0.7%) also is rated Outperform, while Commercial Metals (CMC -0.1%) and Nucor (NUE +0.3%) are rated Neutral.
Wed, Mar. 2, 2:47 PM
- Steel company shares are soaring following news of U.S. anti-dumping duties in the cold-rolled sheet trade case, with China receiving a 266% duty, which should effectively lock the country out of the U.S. market; Japan and Brazil were nailed with respective duties of 71% and 39%.
- J.P. Morgan analysts call the tariffs a win for U.S. steel stocks including U.S. Steel (X +22%), AK Steel (AKS +17.4%), Steel Dynamics (STLD +5.2%) and Nucor (NUE +2.6%), as trade cases filed by the U.S. and around the world eventually will close the door to the export market for surplus Chinese steel, and China will have to cut its steel capacity to come in line with Chinese domestic demand.
- With steel prices rebounding off of a bottom and the companies clearly demonstrating they have enough liquidity, J.P. Morgan believes the stocks should continue to outperform as shorts find it difficult to portray a possibility of near-term bankruptcies.
- Also: MT +11.7%, CLF +19.5%, CMC +1.2%, WOR +2.9%, ZEUS +13.2%, SLX +6.9%.
Tue, Mar. 1, 7:03 PM
- The U.S. government announces tariffs of 266% on steel imports from China, with goods from Brazil, India, South Korea, Russia, Japan and the U.K. subject to smaller duties.
- It is the second time since December that the U.S. government has penalized foreign steel producers, including Chinese mills, for selling steel in the U.S. at unfairly low prices.
- Analysts say the duties may not fully satisfy U.S. producers, as the 6.9% rate for South Korea, the second-largest source of the products, was far below what the industry alleged.
- Related Tickers: AKS, X, NUE, MT, CMC, STLD, WOR, ZEUS, SLX.
Nov. 3, 2015, 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%.
Oct. 19, 2015, 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.