Wed, Mar. 25, 3:35 PM
- U.S. Steel's (X +1.4%) announcement that it will idle an Illinois plant and lay off more than 2,000 workers is providing a sector-wide boost, as AK Steel (AKS +3.2%) and Steel Dynamics (STLD +1.3%) also enjoy strong gains.
- With hot-rolled coil prices yet to find a bottom and currently at $471/ton, Citi analysts say it makes sense that U.S. Steel would continue to take actions to rationalize production and streamline operations to mitigate costs.
- Perhaps even more important, firing 2K-plus employees likely will be used as further evidence of damage to the U.S. steelmaking industry from high imports flows that were primarily responding to elevated U.S. price premiums, boosting the case for higher tariffs, Citi says.
Fri, Mar. 20, 2:39 PM
- AK Steel (AKS -5.2%) is sharply lower after reporting downside Q1 guidance, citing lower than expected carbon steel spot market shipments and prices due to high levels of what it sees as unfairly traded imports, but most other steel names sport nice gains: X +4.3%, MT +2.9%, NUE +2.8%, STLD +1.9%, WOR +2.5%, CMC +2.3%.
- Various factors but especially the strong dollar are sparking a surge in steel imports, resulting in a tough Q1 for all U.S. steel producers, but most of the companies also say Q2 and H2 2015 should be a bit better as demand is fairly strong in many end markets (Briefing.com).
- NUE said this week that steel mill margins for all products should improve in Q2 as it begins to realize the benefits of lower raw materials costs and selling prices begin to stabilize, while STLD said continued strength in domestic steel consumption from the auto, manufacturing and construction sectors should support a stronger Q2 and H2.
- Credit Suisse analysts prefer US Steel in the group "with the caveat that this is a 1-3 year view."
Fri, Mar. 20, 9:23 AM
Thu, Mar. 19, 5:40 PM
- AK Steel (NYSE:AKS) -7.8% AH after guiding Q1 results below Wall Street expectations, now expecting to report a net Q1 loss of $0.23-$0.28 per share vs. the analyst consensus estimate for a $0.01 loss.
- AKS says Q1 operations have been significantly hurt by lower than expected carbon steel spot market shipments and prices due to unexpectedly high levels of what the company believes are unfairly traded imports; AKS expects Q1 shipments of ~1.73M tons, a 14% Q/Q decline.
- Earlier: Nucor cuts Q1 guidance
- Earlier: Steel Dynamics sees Q1 earnings below consensus
Thu, Mar. 19, 5:37 PM
Mon, Mar. 16, 5:19 PM
- Steel stocks (NYSEARCA:SLX) finished mostly lower after a WSJ weekend report on increasing Chinese steel exports and an analyst note that lowered price targets on the sector.
- WSJ said China's steel exports rose 63% Y/Y to 9.2M tons in January, and that as China's growth slows it is shipping its excess steel overseas, resulting in lower prices and prompting steel producers all over the world to seek government protection.
- Also, Jefferies cut price targets on several sector names after what it sees as a challenging Q1, noted that most of its contacts expect steel prices to trough sometime in Q2, and said it believes mini-mill producers such as Steel Dynamics and Nucor are best positioned in the group.
- In today's trade, X +0.7%, NUE +1.1%, STLD +0.1%, AKS -1.5%, WOR -2.3%, CMC -3%, SCHN -4.7%.
Tue, Mar. 3, 9:09 AM
- U.S. Steel (NYSE:X) -2% and AK Steel (NYSE:AKS) -3.7% premarket after Nomura downgrades each stock to Neutral from Buy, with respective price targets of $21 (lowered from $37) and $4 (cut from $10).
- The firm sees two major structural changes underway that should significantly alter the global steel landscape in the coming years: dollar strength and cost curve deflation driven by lower raw material prices and freight rates.
- Flat-rolled and long product import pressure have been significant headwinds for the industry over the past year, and Nomura expects further dollar appreciation into 2016 will keep import pressure high.
Fri, Feb. 6, 12:34 PM
- Wells Fargo’s Sam Dubinsky recommends shorting U.S. Steel (X +0.4%) and buying Steel Dynamics (STLD +1.1%) because of how the companies can hold up against declining U.S. scrap metal prices.
- Dubinsky says STLD and X are both trading at 7x EBITDA at $500/ton hot-rolled steel, but believes STLD has a better balance sheet, leaner cost structure and no oil country tubular goods exposure, which could be a greater than anticipated headwind for U.S. Steel; if steel pricing proves worse than forecast, STLD is simply a safer play.
- The analyst also estimates Nucor (NUE +2.4%) is trading near 8.5x EBITDA, while AK Steel (AKS +2.9%) is at 14x.
Tue, Jan. 27, 3:34 PM
- AK Steel (AKS +5.8%) beat Q4 expectations amid rebounding auto and construction industries, prompting S&P Capital to upgrade shares to Strong Buy from Hold with a $6 price target, encouraged by stronger-than-expected synergies from the Dearborn acquisition, lower input costs and energy costs, and a strong auto market that comprised half of AKS revenue in 2014.
- However, other analysts gave the beat a cooler reception; Citigroup's Brian Yu, for one, maintains a Sell rating and $2 price target, unconvinced by Q4's improved shipments of 2M tons and realized pricing of $987/ton vs. the firm's model of $980/ton.
Tue, Jan. 27, 9:46 AM
- AK Steel (AKS +5.1%) opens higher after reporting a strong Q4 earnings beat and a 36% increase in revenues to $2B on sharply higher shipments, due to strong automotive sector demand and a boost from a recent acquisition.
- Average selling prices fell 4% Y/Y to $987/ton from $1,031/ton reported in the year-ago quarter, mostly on the higher proportion of hot-rolled coil shipments in the overall sales mix stemming from its September acquisition of Dearborn Works; shipments jumped 42% due to strong demand in the automotive sector and the Dearborn Works acquisition.
Tue, Jan. 27, 9:10 AM
Tue, Jan. 27, 8:32 AM
Mon, Jan. 26, 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.
Mon, Jan. 26, 5:30 PM
Mon, Jan. 26, 12:29 PM
- With just a week of bargaining left until the national contract for U.S. refinery workers expires, talks over a new agreement between the United Steelworkers union and lead oil company negotiator Royal Dutch Shell (RDS.A, RDS.B) appear to be making little progress.
- The USW rejected the first industry proposal on Friday, calling it "inadequate and offensive."
- The union is seeking annual pay raises double those of the last agreement, and wants work given to non-union contractors to go to USW members.
- Reltaed steel tickers: X, AKS, NUE, STLD, CMC, ATI
Fri, Jan. 23, 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
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