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, 10:34 AM
- AK Steel (AKS +2.6%) is upgraded to Overweight from Neutral with a $5 price target at J.P. Morgan, which believes fundamentals for domestic integrated steel makers have bottomed.
- Steel prices likely have recently hit bottom, and falling imports coupled with stable demand should push steel prices higher throughout the end of the year, the firm says, adding that AK’s Q2 results instead of its Q3 should represent a low for the current cycle.
- While the macro environment remains negative due to the strong dollar, a weaker Chinese economy and weak oil prices, lower imports should push steel prices, and AK’s earnings and stock price higher in the near term, the firm says.
- JPM expects hot-rolled prices to increase to the low $500/ton area by year-end as the import situation sees some improvement and demand remains stable; trade cases should help to reduce imports into the U.S., which in any case is no longer as attractive of a destination for exports given current prices.
Tue, Jul. 28, 2:25 PM
- AK Steel (AKS +13.5%) soars despite a mixed Q2 earnings report, after joining domestic steel producers U.S. Steel (X +5%), Nucor (NUE +2.2%), Steel Dynamics (STLD +6.9%) and Arcelor Mittal (MT +5.4%) in filing a trade case against steel dumping by eight countries related to cold-rolled steel products.
- The news apparently made investors optimistic that AKS can overcome low steel prices, which caused the company to miss Wall Street’s EBITDA forecasts.
- KeyBanc analyst Philip Gibbs notes that based on comments on the AKS earnings conference call, hot-rolled and stainless steel trade cases look likely.
- AKS says Q2 shipments totaled 1.811M tons vs. 1.75M in Q1 and 1.39M in Q2 2014, and expects to generate improved results for Q3 and H2 relative to their comparable periods a year ago, citing anticipated higher shipments, improving carbon steel spot market prices, increased production levels resulting in lower per ton operating costs, and the continuing benefit of lower raw materials costs, particularly iron ore.
- Citi analysts believe AKS likely will continue to struggle to post positive free cash flow absent a sharp price recovery.
Tue, Jul. 28, 8:31 AM
Mon, Jul. 27, 5:30 PM
- AGCO, AHGP, AIXG, AKS, ALLY, AMG, ARG, ARLP, ARW, AUDC, AUO, AXE, BP, BTU, CIT, CMI, CNC, CNX, COMM, CPLA, CRY, CVLT, CYNO, DD, DHI, DHX, ECL, F, FBC, FCH, FDP, FMER, FSS, GLW, GPN, GRUB, ICLR, IPGP, IPI, IR, JBLU, JEC, KEM, LH, LPT, LYB, MAS, MMC, MRK, MZOR, NCI, NLSN, NOV, NTLS, OAK, OFC, PCAR, PCH, PCP, PFE, POR, RAI, RDWR, SALT, SIR, SIRI, ST, SVU, TXT, UPS, UTHR, WAT, WDR, WYN
Tue, Jul. 21, 11:53 AM
- Steel stocks are higher after Steel Dynamics (STLD +6.8%) issues solid Q2 earnings and says it expects improved financial results in H2 driven by reduced steel import volumes and sustained lower scrap costs.
- STLD says it generated $309M in cash flow from operations during Q2, a 32% Q/Q increase.
- Still, Citigroup’s Brian Yu thinks STLD's results hint at tough times for AK Steel (AKS +3%) and U.S. Steel (X +2.1%); with utilization rates at 87% in Q2 vs. the 72% industry average, STLD may have been more aggressive taking share in the quarter, which along with lower engineered bar shipments, could help explain the drop in realized mills pricing and margins.
- Longbow’s David MacGregor argues that "trade cases are the [steel] market’s only hope now."
Mon, Jul. 13, 2:15 PM
- Vale (VALE +6.9%) and other iron ore peers are rallying after reports that Vale plans to cut iron ore production in an attempt to boost profit.
- Peter Poppinga, Vale's executive director for ferrous and strategy, told an industry conference in Sao Paulo today the company would lower iron ore output by 25M metric tons starting this month, with the cuts coming from lower quality products at its mines in south and southeast Brazil and from third-party purchases.
- “Our mantra is not volume at any cost anymore, it’s to maximize margins,” Poppinga said. “It doesn’t mean shutting mines, it means optimizing some production flows at plants.”
- Poppinga also said prices for iron ore, which have been cut almost in half in the past year, are poised to rebound as China shuts mines and replenishes inventories.
- Also: RIO +3.9%, BHP +2.9%, SID +8.4%, CLF +7.2%, X +4.7%, AKS +7.4%, MT +2.4%, NUE +2%, STLD +2.3%.
Thu, Jun. 25, 4:59 PM
- The Commerce Department opened an investigation today into a complaint by U.S. steel producers that asks the government to impose duties on low-cost corrosion-resistant steel products imported from six countries.
- Six petitioners - U.S. Steel (NYSE:X), Nucor (NYSE:NUE), AK Steel (NYSE:AKS), Steel Dynamics (NASDAQ:STLD), the U.S. subsidiary of ArcelorMittal (NYSE:MT) and California Steel Industries - filed a complaint earlier this month that the low import prices of the products imported from China, India, Italy, South Korea and Taiwan have exerted downward pricing pressure across the entire U.S. market for corrosion-resistant steel products.
- If illegal dumping is found, the sanctions are applied retroactively to the date that the trade case was filed, Morningstar's Andrew Lane says, adding that "importers would become more wary about importing goods that may be subjected to a retroactive tariff. Therefore the publicly traded domestic steel makers will see an uptick in the shipment volumes."
Fri, Jun. 19, 6:14 PM
- AK Steel (NYSE:AKS) -1.9% AH after issuing below consensus Q2 earnings guidance, saying it expects to report a net EPS loss of $0.42-$0.37 vs. the analyst consensus estimate of a $0.30 loss.
- AKS says results continue to be hurt by lower carbon steel prices due to the continued high level of what the company believes are unfairly traded imports.
- AKS expects Q2 shipments of ~1.8M tons, up 3% Q/Q, at an average selling price of $929/ton, down 7% Q/Q.
Thu, Jun. 4, 5:15 PM
- U.S. steel producers (NYSEARCA:SLX) have enjoyed no bump at all from the anti-dumping case filed yesterday against imports of corrosion resistant (i.e., coated) steel from China and four other countries by U.S. Steel (NYSE:X), Nucor (NYSE:NUE), Steel Dynamics (NASDAQ:STLD), AK Steel (NYSE:AKS), ArcelorMittal USA (NYSE:MT) and California Steel Industries.
- Deutsche Bank's Jorge Beristain views the move as a positive, as imports of coated sheet from the five subject countries rose 85% during 2012-14 to 2.75M tons from 1.5M, but notes that a final determination could take 10-11 months; within the firm's coverage, companies with the largest exposure to coated steels are AKS (46% of revenue), X (20%), STLD and NUE.
- Cowen’s Anthony Rizzuto suggests using weakness to add to positions, believing a cold-rolled case may be filed in the near-term and remaining constructive on steel fundamentals.
Wed, Jun. 3, 2:15 PM
- Six major U.S. steel producers file petitions with the U.S. Department of Commerce and the U.S. International Trade Commission alleging that unfairly traded imports of steel from China and four other countries are causing material injury to the domestic industry.
- U.S. Steel (X -0.6%), Nucor (NUE +0.9%), Steel Dynamics (STLD +0.9%), AK Steel (AKS +1.6%), the U.S. subsidiary of ArcelorMittal (MT +1.7%) and California Steel Industries say they are filing the petitions in response to large and increasing volumes of low-priced imports of corrosion-resistant steel over the past three years that have injured U.S. producers.
- In addition to China, the other four countries cited by the U.S. steel makers are India, Italy, South Korea and Taiwan.
Mon, Jun. 1, 10:41 AM| Mon, Jun. 1, 10:41 AM | 1 Comment
Tue, May 12, 3:42 PM
- Apollo Global Management (NYSE:APO) is leading the creditor group seeking to take control of Magnetation after the iron ore producer that filed for bankruptcy last week, Bloomberg reports.
- APO increased its share of the company’s bonds after AK Steel (NYSE:AKS) pulled the plug on the joint venture last month, taking a $256M impairment charge on its 49.9% stake following a plunge in iron ore prices and citing Magnetation’s inability to access more capital.
- The secured creditors will get 75% of new common stock, 90% new convertible preferred stock and $235.5M in second-lien notes.
Mon, May 11, 12:59 PM
- AK Steel (AKS +3.8%) is reiterated with a Buy rating and $9 price target at BofA Merrill, based on better global electrical steel demand, falling iron ore costs and an improving free cash flow story as estimated 2015 project spending tapers off.
- BofA says its meeting with CFO Roger Newport revealed optimism that the recent $20/ton price hike was sticking and more could follow.
- The firm also says AKS is the only beneficiary of lower iron ore prices in its coverage universe, as even with its Magnetation investment the company will still rely on third party iron ore for half its needs.
Tue, Apr. 28, 10:48 AM
- AK Steel (AKS +7.2%) surges higher despite posting a wider than expected Q1 loss, as revenues rose 27% Y/Y to $1.75B.
- Shipments surged 39% Y/Y to 1.75M tons, helped by a boost from an acquisition and strong demand from the automotive sector, but fell 13% from Q4 shipments of ~2M tons; average selling prices fell 8.9% Y/Y.
- AKS took a $256M writedown related to its investment in iron ore pellet joint venture Magnetation LLC, citing near-term liquidity issues caused primarily by a recent significant decline in global iron ore pellet pricing.
- AKS had warned last month that it would post a Q1 loss, with a 14% Q/Q decline in shipments to ~1.73M tons, due to high levels of steel imports.
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