Fri, Oct. 16, 1:12 PM
- Cliffs Natural Resources (CLF -3.7%) continues to enjoy its role as the most competitive pellet supplier in the U.S., and is likely to eventually return to its position as sole supplier to Essar Algoma despite the current iron ore spat between the companies, J.P. Morgan analyst Michael Gambardella says.
- Gambardella views Essar's announcement yesterday that it secured “an alternate, interim iron ore supply" as a bargaining tactic as it tries to improve its position amid negotiations with CLF.
- U.S. Steel (NYSE:X) would be Essar's only other possible supplier within the Great Lakes, but the analyst sees this as unlikely since U.S. Steel also is a competitor to Essar in steel products; Essar’s supplier outside the Great Lakes could be Iron Ore of Canada, in which case Essar "would be paying an unsustainable $30/metric ton incremental shipping cost via the St. Lawrence Seaway."
Fri, Oct. 9, 10:27 PM
- U.S. Steel (NYSE:X) says the Ontario Superior Court of Justice has approved the separation of the company from its Canadian unit.
- Under the court-approved restructuring plan, U.S. Steel will continue to provide services to the Canadian unit for two years but would not bid for the unit in the event of a sale or restructuring process.
- The U.S. company says it will not be generating any sales on behalf of U.S. Steel Canada and will load its production of critical automotive products on its U.S. mills.
- U.S. Steel had applied for relief from creditors under Canada's Companies' Creditors Arrangement Act for its Canadian operations last year after reporting total operating losses of ~$2.4B.
Wed, Oct. 7, 2:19 PM
- Cliffs Natural Resources (CLF -10.8%) tumbles after terminating its pellet supply agreement with Essar Algoma following nine months of litigation over alleged breaches of contract by Essar including failure to purchase minimum contracted volumes.
- CLF is the sole supplier of iron ore pellets to Essar, shipping ~3M tons/year to the company's mill, and says it remains open to resuming its deal.
- Citigroup analysts see some risk that Essar turns to U.S. Steel (X +4.6%), who has excess capacity at its Minnesota operations due to reduced utilization at its steel mills; Citi believes CLF may offer a freight advantage vs U.S. Steel, but Essar could choose to diversify its supplier base to mitigate a potential cost increase.
Tue, Oct. 6, 6:43 PM
- U.S. Steel (NYSE:X) says it is considering a consolidation of its North American flat-rolled steel operations and may temporarily idle steelmaking operations at its Granite City Works plant in Illinois as it tries to cope with depressed steel prices and challenging market conditions.
- U.S. Steel says 2,000 employees at the plant are being notified of the possibility that the plant may be idled; the company says operations in Indiana, Michigan and Pennsylvania will continue.
- SunCoke Energy (SXC, SXCP), which supplies coke to the Granite City Works, says it expects U.S. Steel to honor its contract regardless of any potential temporary idling.
Thu, Oct. 1, 9:58 AM
- BofA Merrill Lynch maintains its Underperform rating on U.S. Steel (X -0.7%) and cuts its price target to a Wall Street low $8 from $11, expecting weakness in tubular goods to persist through 2016 on bloated inventory and oversupply combined with weak rig counts.
- The firm cuts U.S. Steel's 2016 tubular forecast to to marginally above breakeven and expects realized sheet selling prices to suffer a severe drop in 2016 due to repricing of annual contracts.
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.
Wed, Sep. 23, 12:38 PM
- U.S. Steel (X -3%) and the United Steelworkers will resume contract talks on Sept. 27, according to an update from the union.
- The union says U.S. Steel has proposed dramatic benefit cuts and employee health care premiums for active employees.
- The negotiations cover more than 16,500 employees in production, maintenance, office and technical and plant protection units from 24 local unions across the U.S.
- The previous labor agreement expired Sept. 1, but the union has continued to work at U.S. Steel facilities.
Tue, Sep. 22, 9:07 AM
- Mining shares are leading a big slide in European equities as metals prices tumble on fears that an economic slowdown in China, the world’s biggest consumer of raw materials, is deepening.
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) fell to a new intraday low of 107 pence/share, down more than 9% for the worst performance on the U.K.’s FTSE 100 index; Anglo American (OTCPK:AAUKF, OTCPK:AAUKY), ArcelorMittal (NYSE:MT) and Antofagasta (OTC:ANFGF) each fall more than 6%, while BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) rank among the 10 biggest decliners, down ~4.3% each.
- Credit Suisse cuts its earnings estimates across the mining sector, saying “Until China demand and emerging market currencies find a floor, it will remain challenging to put an absolute floor on commodity prices."
- The firm cuts its stock price targets for diversified miners including BHP, which also says it is planning to sell hybrid securities to help refinance near-term liabilities.
- Moody's says miners likely will be the hardest hit of any sector in Europe, the Middle East and Africa as a result of China’s economic slowdown.
- Also: FCX -4.5%, VALE -4.1%, X -2.8%, AA -1.7% premarket.
Fri, Sep. 18, 2:45 PM
- U.S. Steel Canada (X -4.8%) says it will seek a court order to continue restructuring under court protection beyond this year.
- The company says it has been unable to negotiate a sale of its Ontario operations in Hamilton and Nanticoke, or reach a restructuring agreement, and likely would have to cease operations at year-end without an extension of the court protection.
- Also contributing to the need for the court order are steps taken by the U.S. Steel parent company to reallocate Canadian production to its facilities located in the U.S., the company says.
Thu, Sep. 17, 2:58 PM
- Axiom Capital’s Gordon Johnson sees the potential for a “Nightmare on Elm Street scenario” for companies such as U.S. Steel (NYSE:X), Cliffs Natural Resources (NYSE:CLF), Joy Global (NYSE:JOY), Rio Tinto (NYSE:RIO), Fortescue Metals (OTCPK:FSUMF) and United Rentals (NYSE:URI), as steel usage tumbles and truck and crane orders crumble.
- The analyst says U.S. shipments of steel in August totaled 3.3M tons, down 3.8% M/M and 8.9% Y/Y, and compared to the six-year average change of +6.7% M/M and +5.1% Y/Y, suggesting unseasonably weak U.S. demand.
- Johnson also points to today's decision by Konecranes - a global bellwether in the sale of industrial cranes - to cut its full-year guidance due to “rapidly changing market sentiments” in the equipment space.
Fri, Sep. 11, 6:41 PM
- In a setback for U.S. steel producers, the U.S. Court of International Trade says the Commerce Department should reconsider its calculation of profit, which could change the level of duties imposed last year on imports of tubular steel pipes for the energy sector.
- The ruling is in agreement with South Korean steel producers who complained that the U.S. duties were too high.
- The Commerce Department and U.S. International Trade Commission last year backed a complaint by U.S.-based steel companies including U.S. Steel (NYSE:X).
- Other relevant tickers: AKS, NUE, TS, STLD
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.
Wed, Sep. 2, 12:58 PM
- U.S. Steel (X +0.5%) is added to the Focus List at J.P. Morgan with an Overweight rating and $28 price target, saying the company enjoys significant leverage to an improvement in steel prices.
- JPM analyst Michael Gambardella sees a positive inflection point in steel fundamentals, and says pending steel trade cases could act as positive catalysts to more than offset the headwind of a strong U.S. dollar.
- The firm removes Allegheny Technologies (ATI -0.2%) from its Focus List, believing much of the expected downside risk has played out and that ATI’s earnings will remain under pressure from a challenging stainless steel market and a strong dollar pressuring its high performance exports.
Tue, Aug. 11, 5:37 PM
- Six of the biggest U.S. steelmakers - U.S. Steel (NYSE:X), Nucor (NYSE:NUE), AK Steel (NYSE:AKS), ArcelorMittal (NYSE:MT), Steel Dynamics (NASDAQ:STLD) and SSAB Enterprises - file another petition asking for tariffs on imports of foreign steel, and warn that China’s devaluation of the yuan could have severe repercussions on their industry.
- The request includes imports of hot-rolled coil, which is used in making cars, from Australia, Brazil, Japan, South Korea, the Netherlands, Turkey and the U.K.; China was not named because the U.S. already has tariffs on hot-rolled imports from China.
- Imports of hot-rolled steel from the seven countries rose 73% during 2012-14, rising to 3.3M tons from 1.9M tons, according to AK Steel.
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, 8:32 AM
- U.S. Steel (NYSE:X) +1.8% premarket after J.P. Morgan upgrades shares to Overweight from Neutral with a $28 price target, up from $26, with the firm saying it had expected the company's results to bottom in Q3 but now appears to have bottomed in Q2 based on solid cost reduction efforts.
- The firm sees prices for hot-rolled coil increasing to the low $500/ton area by the end of 2015, with the imports scenario improving and demand remaining stable.
- JPM expects X to benefit from $375M incremental cost improvements in H2 and reach the low end of its 2015 adjusted EBITDA guidance of $700M-$900M, provided market conditions continue improving at the current pace.
Other News & PR