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%.
Apr. 21, 2014, 5:27 PM
- The U.S. Commerce Department rules that imported steel rebar from Mexico and Turkey unfairly undercuts U.S. prices; companies in Mexico and Turkey will be subject to duties ranging from 2% to 66%.
- Nucor (NUE), Commercial Metals (CMC) and other U.S. steel producers alleged that Mexican and Turkish competitors were undercutting their prices, as rebar imports from the two countries have nearly doubled from 2011 to 2013.
Mar. 27, 2014, 9:05 AM
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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. 24, 2014, 7:56 AM
- US Steel (X), Commercial Metals (CMC) and Steel Dynamics (STLD) are downgraded to Hold from Buy at KeyBanc.
- US Steel -1.2% premarket as the firm cites stronger than expected flat rolled pricing headwinds and unexpected negative developments in the tubular segment, which has profit and valuation multiple consequences, as reasons for the downgrade; all else equal, every $5/ton change in flat rolled pricing equates to $70M-$75M in EBITDA and ~$0.35/share in earnings.
- CMC and STLD are downgraded based on valuation and more cautious near-term expectations, as flat rolled spreads decline and metals recycling profitability struggles in H1.
Jan. 17, 2014, 5:58 PM
- Steel stocks are starting to cool off after a hot six months, and Citigroup thinks they could cool off even more, with even a pickup in demand after a lackluster 2013 not enough if prices don’t stay high.
- Steel imports that grew 4% in H2 2013 should accelerate and pull down U.S. markets, and weather-disrupted scrap supply which supported prices should normalize/correct in coming months, the firm says, adding that many steel names look less compelling on valuation after big gains.
- Cit rates Steel Dynamics (STLD) a Buy for its valuation, margins and links to the construction industry, while Nucor (NUE) and Commercial Metals (CMC) get Neutral ratings; US Steel (X) is Neutral too, but "would risk multiple-compression if [hot rolled cold steel] corrects."
- The firm's least favorite: AK Steel (AKS), “based on our outlook for negative free cash flow due to pension/OPEB funding obligations, leveraged balance sheet, and challenging stainless markets."
Jan. 7, 2014, 8:07 AM
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CMC vs. ETF Alternatives
Commercial Metals Co recycles, manufactures, fabricates and distributes steel and metal products and related materials and services through a network of locations throughout the United States and internationally.
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