VanEck Vectors Steel ETFNYSEARCA
Wed, Nov. 30, 10:24 AM
- Noting that ArcelorMittal (MT +1.8%) has raised its hot-rolled sheet pricing by $40/ton to $600/ton, J.P. Morgan's Michael Gambardella raises his price targets on several stocks in the U.S. steel industry (SLX +1.5%).
- He increases his target for AK Steel (AKS +3.1%) to $11 from $8.50, on Nucor (NUE +0.6%) to $70 from $59, on Steel Dynamics (STLD +0.9%) to $41 from $31, on U.S. Steel (X +3.3%) to $37 from $29, and on Cliffs Natural Resources (CLF +1.2%) to $10 from $7, while keeping Overweight ratings on all five stocks.
- Gambardella says supply cuts in the U.S. from both capacity curtailments and lower imports should support higher U.S. steel prices, and thinks the Trump administration's impact on trade could be "much quicker and more meaningful" than its infrastructure plans.
Tue, Nov. 29, 12:41 PM
- Steel stocks (SLX -2.4%) look expensive following their post-election rally, but the strong U.S. dollar could keep a lid on prices while slowing growth in China could derail the steel price rally, Macquarie analysts say as they downgrade several names in the sector.
- U.S. steel prices have risen to $550-$560/ton, driven partly by tight domestic supply and a lack of imports, but at current levels steel stocks reflect steel prices of more than $600/ton, increasing the risk posed by the shares, the firm says.
- Macquarie downgrades Nucor (NUE -0.5%), TimkenSteel (TMST -1.9%) and Worthington (WOR -3.5%) to Underperform from Neutral, and cuts Steel Dynamics (STLD -0.3%), AK Steel (AKS +0.1%) and Reliance Steel (RS -0.1%) to Neutral from Outperform; U.S. Steel (X -2%) is maintained at Underperform, while Argus analysts downgraded X, saying the shares are overbought.
Tue, Nov. 22, 3:45 PM
- U.S. Steel (X +11.4%), AK Steel (AKS +10.7%), Steel Dynamics (STLD +4.1%), Nucor (NUE +4.4%) and Commercial Metals (CMC +4.7%) all surge to 52-week highs, extending their Trump-fueled rally as trade protectionist talk suggests that higher than usual premiums can be achieved for steel mills.
- BofA Merrill Lynch raises its 2017 average price estimate for U.S. hot-rolled coil to $650/short ton vs. its prior view of $535, as rising global prices and more protectionism should fuel strong steel prices into 2017 (SLX +5.8%).
- Bloomberg reports BofA boosted its stock price targets for Buy-rated AKS to $12 from $7, STLD to $37 from $30, CMC to $24 from $20, NUE to $65 from $57, and Allegheny Tech (ATI +7.5%) to $20 from $19; the firm remains Neutral on X and Reliant Steel (RS +6.1%).
- Also sharply higher today: MT +8.3%, CLF +13.8%, WOR +5.3%, RIO +4.1%, BHP +5.2%, VALE +7.8%.
Wed, Nov. 16, 2:43 PM
- Despite a sector-wide rally in the steel sector (SLX -1.6%) following Trump's election win, some players will be left out of an infrastructure-driven growth spurt and may take big hits under Trump's promised protectionism, J.P. Morgan's Michael Gambardella warns.
- Carbon steel makers such as Commercial Metals (CMC -0.5%), U.S. Steel (X -0.2%), AK Steel (AKS -1.9%), Steel Dynamics (STLD -0.1%) and Nucor (NUE -0.8%) should benefit from infrastructure spending and potential supply cuts brought on by a harsher trade environment, according to Gambardella.
- But specialty steel companies including Allegheny Tech (ATI -5.9%), Carpenter Tech (CRS -2.6%) and Haynes (HAYN -12.2%) have little exposure to infrastructure applications as well as significant export businesses, whose 30%-plus revenue contribution would decline under a stronger dollar and retaliatory trade policies, the analyst says.
Mon, Nov. 14, 10:31 AM
- AK Steel (AKS +8.8%) shoots to a new 52-week high after Morgan Stanley upgrades steel company shares (SLX +1.7%), including AKS to Overweight from Equal Weight with an $11 price target, up from $5.
- The firm cites Pres.-elect Trump’s proposals for increased infrastructure spending and increased trade protection as having the potential to push the U.S. steel market into meaningful undersupply for the first time since the financial crisis.
- Trump's stimulus plan could conservatively boost steel demand by 20%/year for five years and means continued efforts on the steel trade protection front, Stanley says, raising its mid-cycle price estimate to $225/ton from $175.
- Stanley also upgrades U.S. Steel (X +7%) to Overweight from Equal Weight with a $46 price target, hiked from $19, Tenaris (TS +0.3%) to Overweight with a $42 price target, and Cliffs Natural Resources (CLF +2.3%) to Equal Weight from Underweight with a $9 target, raised from $3.
Mon, Nov. 7, 4:42 PM
- The Commerce Department formally opens an investigation into allegations that Chinese steel producers are shipping steel (NYSEARCA:SLX) through Vietnam to avoid U.S. import tariffs.
- A petition filed in September by ArcelorMittal USA (NYSE:MT), Nucor (NYSE:NUE), AK Steel (NYSE:AKS) and U.S. Steel (NYSE:X) alleged that Chinese steelmakers have shipped metal to Vietnam, made enough changes to it that they could then classify it as Vietnamese, and then shipped it to the U.S. under the lower tariffs charged on Vietnamese steel.
- The Vietnamese corrosion resistance processing was "simple" and added only a small amount of value to the finished product imported into the U.S., with up to 90% of the value produced in China, the DoC says.
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