Jun. 16, 2014, 9:10 AM
- AK Steel (AKS) +5.1% premarket after BofA/Merrill upgrades shares to Buy from Neutral with a $10 price target, up from $9, citing better global electrical steel demand, falling iron ore costs which should start to benefit AKS in Q3, and an improving free cash flow story into 2015.
- The firm says AKS is the only beneficiary of lower iron ore prices in its coverage universe, as AKS still relies on third party iron ore for half its needs even with the Magnetation investment.
- AK operations should be back to normal by Q3 with the return of its Ashland, Ky., furnace in late Q1 and after playing catchup with customers, BofA ads.
Jun. 4, 2014, 2:39 PM
- A bullish outlook on steel released in Japan by Credit Suisse could be moving sector stocks in the U.S., Barron's Ben Levisohn writes, even though conditions for the U.S. industry don't look especially promising.
- U.S. Steel (X +3.9%) is enjoying its biggest one-day percentage gain since Dec. 23; some sources cite news of its idling two plants in Texas and Pennsylvania that produce tubular products for the oil and gas industries, but that was announced two days ago.
- Suggesting investors tread lightly on steel stocks, Wells Fargo analysts expect steel imports to remain at elevated levels as domestic vs. international price spreads are more than $100/ton across all flat and long products; imports typically increase when U.S. pricing is at a greater than $100 premium.
- Also: AKS +3.4%, SCHN +1.7%, CMC +0.8%, STLD +0.3%, NUE -0.2%.
May 14, 2014, 10:46 AM
- U.S. steel imports (SLX) are approaching record levels, prompting calls for new import tariffs as well as the highest number of trade complaints in more than a decade, as a recent increase in China's steel exports heightens the tension.
- The surge in imports reflects oversupply abroad, which has cut prices, and strong U.S. demand spurred by energy drillers and a resurgent auto industry.
- A wave of U.S. trade rulings is expected this summer, but officials so far have refused to impose new tariffs on products used in drilling for oil and natural gas, which doesn't please Sen. Sherrod Brown of Ohio, who says operators of U.S. mills such as U.S. Steel (X), AK Steel (AKS) and ArcelorMittal (MT) should accept slightly higher prices for domestic steel.
May 13, 2014, 2:08 PM
- Annual global steel oversupply is now running at more than $500M/year, twice as much as in 2001, according to a new U.S. steel industry-backed report.
- The steel industry (SLX) is facing its "biggest import crisis since 2001," and high levels of imports are continuing and are a threat to the profitability of companies such as U.S. Steel (X) and AK Steel (AKS), the report says; in Q1, imports by U.S. companies rose 36% to 10.6M tons, a trend driven by excess capacity overseas and by a strong U.S. market due to the esurgent auto industry, and oil and gas drilling.
- In response, U.S. producers are filing more trade complaints and seeking new import tariffs.
Apr. 22, 2014, 9:44 AM
- AK Steel (AKS -3.4%) reports a wider Q1 loss on higher production costs due to an unplanned outage of the Ashland Works blast furnace and high energy costs caused by extremely cold winter weather.
- Shipments fell 2.1% Y/Y to 1.26M tons, reflecting lower shipments of electrical steel and of carbon steel to the spot market, partially offset by higher automotive shipments; however, average selling prices rose 3% to $1,096/ton, primarily due to a richer shipment mix of value-added products.
Apr. 22, 2014, 8:31 AM| Comment!
Apr. 22, 2014, 12:05 AM
Apr. 21, 2014, 5:30 PM
Apr. 8, 2014, 3:38 PM
- Steel companies (SLX +1.4%) are higher after Cowen analyst Anthony Rizzuto says improving steel market fundamentals are likely to provide a catalyst for steel stocks to rise.
- With Q1's bad weather now finished, the domestic steel market appears to be tightening and sentiment improving, Rizzuto says, expecting investors to focus more on the outlook for the remainder of 2014 than on Q1 results.
- The firm rates US Steel (X +3.1%), ArcelorMittal (MT +2.5%) and Reliance Steel (RS +0.3%) at Outperform; AK Steel (AKS +5.9%), Nucor (NUE +1.7%) and Steel Dynamics (STLD +1.3%) are Market Perform.
Mar. 25, 2014, 10:41 AM
- U.S. Steel (X +2%) CEO Mario Longhi will tell the U.S. Congressional Steel Caucus today that South Korean steelmakers are dumping steel pipes and tubes in the U.S. and have created a network of related companies in order to evade U.S. trade laws.
- Sales of pipes and tubes sold to oil and gas extracting companies have helped profitability at U.S. Steel, representing 48% of 2013 operating income, as well as other steelmakers such as Nucor (NUE +0.6%).
- Other steel names: AKS +2.3%, ZEUS +2.2%, WOR +1.4%, STLD +1%, CMC +0.9%.
- Aluminum names: CSTM +2.5%, CENX +2.1%, KALU +1%, AA +0.4%, RS +0.2%.
Mar. 21, 2014, 1:28 PM
- AK Steel (AKS +3.4%) expects to report a loss of $0.44-$0.49 per share, brought on by a number of factors not expected to continue, among them higher energy costs thanks to the severe winter.
- Shipments of 1.25M-1.275M tons is are about a 10-12% decrease from Q4. The decline is attributed to the blast furnace outage at Ashland Works.
- The average selling price in Q1 of $1,095 is a 6% gain from Q4.
- Barclays' take: "AKS is best-positioned among the steel producers to deliver significantly improved operating results as 2014 progresses."
- Press release
Mar. 18, 2014, 5:45 PM
Mar. 18, 2014, 3:21 PM
- Steel stocks are higher despite Nucor's (NUE +0.8%) disappointing guidance, which apparently was more than offset by price increases at ArcelorMittal (MT +1.3%) as mills try to stem the downtrend in prices during the past two months.
- Nomura lowers its Q1 earnings estimates for steel stocks ahead of mid-quarter updates from NUE, mini-mill peer Steel Dynamics (STLD +1.5%) and AK Steel (AKS +6%), which are expected within the coming week, but the firm continues to positively view stock performance in the sector going forward.
- Also: X +5.3%, TX +3.1%, SCHN +2.4%, CMC +2.1%, GGB +1.8%, RS +1.8%.
Feb. 20, 2014, 12:22 PM
- Nomura’s Curt Woodworth, who has warned that steel prices would drop and hit shares of AK Steel (AKS -0.9%) and US Steel (X +1.4%), is back with an update because steel prices have dropped faster than he expected.
- Hot rolled sheet prices continue to roll over with spot values near $630-640/ton, Woodworth writes, buttressing his cautious view on U.S. integrated steel stocks as he sees potential for further declines in iron ore and scrap values into the spring and hot rolled steel likely to retest the $600/ton barrier by May.
- The analyst cuts his earnings estimates for X, AKS, Nucor (NUE) and Steel Dynamics (STLD), though he continues to see “greater value” in NUE and STLD.
Feb. 19, 2014, 12:57 PM
- Although the Commerce Department's decision not to impose tariffs on South Korea’s steel pipes used in the oil industry is not yet finalized, analysts believe the negative surprise of zero dumping margins and pressure on margins of tubular goods is of particular concern to US Steel (X -7.4%), concurrent with continued weakness in flat steel prices to begin 2014.
- Wells Fargo analysts believe it is now less clear-cut if OCTG profitability can recover to prior levels, and that investors will be discouraged by the news as a favorable trade case ruling was part of the bull thesis on shares; the firm notes that every $30/ton reduction in domestic steel prices equates to roughly $450M in EBITDA headwinds, which are hard to offset merely by cost reductions.
- Other steel producers also feel the pain: TS -6.1%, AKS -4.1%, NUE -0.6%.
Feb. 5, 2014, 3:29 PM
- The U.S. Commerce Department says steel imports rose 23% in January from December, and Axiom Capital thinks that means steel prices likely will begin to fall, taking US Steel (X -1.7%) and AK Steel (AKS -3.1%) down with them.
- U.S. steel prices, now at significant premiums to global steel prices, "are likely in the beginning innings of a MAJOR CORRECTION LOWER," Axiom says, adding that it would be pressing shorts in US Steel and AK Steel given their exposure to prices and fixed cost structures vs. their non-integrated peers, plus massive pension liabilities.
AKS vs. ETF Alternatives
Other News & PR