Today, 10:16 AM
- J.P. Morgan tells clients to short U.S. Steel (X -2.7%), expecting the company to operate at a loss this year.
- JPM cuts its estimated FY 2015 EPS for the company to a loss of $0.25 from its earlier outlook for a $1.57 gain, and sees FY 2016 EPS of $1.42 vs. its earlier view for $3.00.
- The firm believes a strong dollar, weak oil prices and slowing growth in China will weigh on metals demand.
- Also: AKS -3.6%, NUE -1.3%, STLD -2.1%, WOR -3%, CLF -3.9%, CMC -1.8%, TMST -3.9%, SCHN -1.9%.
- Earlier: U.S. Steel to idle Minnesota plant
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
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.
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
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
Dec. 22, 2014, 11:24 AM
- South Korea says it has filed a complaint with the WTO seeking to nullify U.S. tariffs levied on imports of certain Korean steel products.
- The U.S. Commerce Department in July imposed tariffs of up to 16% on South Korean steel pipes and tubes used for oil drilling in response to the alleged dumping of steel products in the U.S., and the International Trade Commission confirmed the tariffs in August in what was viewed as a victory for U.S. steelmakers (NYSEARCA:SLX).
- Related stocks: X -5.4%, AKS -5.7%, NUE +0.2%, STLD -1.1%.
Dec. 18, 2014, 9:14 AM| 9 Comments
Dec. 17, 2014, 5:40 PM
Dec. 17, 2014, 5:09 PM
- AK Steel (NYSE:AKS) +7% AH after saying it sees Q4 EPS of $0.05-$0.10, above analyst consensus estimate $0.04, despite incurring ~$31M in costs associated with a planned Ashland Works blast furnace outage.
- AKS says it expects shipments to jump 37% Q/Q to 2M tons in the current quarter from ~1.46M shipped in Q3, helped by acquisitions and strong demand from the auto industry.
- AKS also expects to benefit from lower iron ore, carbon scrap and energy costs in Q4 compared to Q3.
- AKS shares already had surged 6% in the regular trading session, as steel companies (NYSEARCA:SLX) finished broadly higher.
Dec. 10, 2014, 2:59 PM
- J.P. Morgan analysts remain cautious on the steel industry (NYSEARCA:SLX), as the high U.S. steel price premium over Chinese prices should continue to attract imports into the U.S. and put downward pressure on domestic steel prices.
- Hot rolled coil prices have fallen 12% from a high of $700/ton this summer, which JPM says was largely due to temporary production outages which are now back in supply.
- While integrated steel mills U.S. Steel (X -5.4%) and AK Steel (AKS -3.3%) are more leveraged to pricing momentum, the firm prefers Steel Dynamics (STLD -3.2%) and Nucor (NUE -2.6%) given their variable cost structures and significant leverage to an eventual recovery in non-residential construction activity.
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