• Fending off foreclosures. Obama unveiled a larger-than-expected $75B housing relief plan yesterday, and set aside $200B of new backing for Fannie Mae (FNM) and Freddie Mac (FRE). The plan will allow as many as 5M homeowners who are underwater or have little equity in their homes to refinance their loans through Fannie and Freddie, and will encourage lenders to modify loan terms. Though the plan drew praise for its use of incentives, critics said it left many issues unsolved, including the difficulty of altering loans packaged into securities or loans not connected to Fannie/Freddie. Many Republicans were also wary of the plan, concerned it will only delay inevitable foreclosures. Notably, the plan will not try to spur demand for real estate and will focus solely on existing at-risk homeowners.
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• Obama wins, futures move lower. European markets and U.S. futures traded lower overnight (see data below) as investors, perhaps, emerged from their election-induced elation and began thinking about the mess President-elect Barack Obama will inherit. Still, analysts at BNP Paribas were optimistic about the leadership change: "Obama has strong personal, political and institutional assets... his program is relatively well adapted to America's needs, in the fields of energy, healthcare, social cohesion and competitiveness." UBS analysts said winners of an Obama victory would be hospitals and nursing-home operators, life-sciences, natural gas firms, solar and life insurers, while losers would include big pharma, managed care, high-end consumer, coal and utilities and integrated oils. More.
• MT misses, paints gloomy picture. ArcelorMittal (MT) reported Q3 profit rose 29% to $3.82B, short of $5.82B analyst estimates, and sales were up 37.9% Y/Y to $35.2B. However, the company warned Q4 earnings (before Ebitda) could fall to $2.5B-$3B from $8.58B in Q3, while analysts expect the current fall in steel prices to hurt Arcelor well into 2009. The company also announced plans for steep production cuts. Output of flat carbon steel will be cut by up to 35% in the U.S. and up to 30% in Europe. Stainless steel supplies and output will be reduced in Asia and Africa. Shares -18% premarket.
• Shell says OPEC cuts lead to force majeure. Shell (RDS.A) declared force majeure on some of its Nigerian crude exports due to OPEC's recent decision to reduce output by 1.5M b/d. The move indicates that Nigeria - a nation with a sketchy history of OPEC compliance - is indeed taking steps to pare production in compliance with OPEC's production cut; some doubted whether OPEC could force member nations to comply. Some Shell customers don't think the OPEC reduction justifies a force majeure declaration.
• Corn Products wants out of Bunge deal. Corn Products International (CPO) said it will withdraw its recommendation of Bunge's (BG) takeover bid. Originally valued at $4.2B, the value of the all-stock offer has plunged 63% along with Bunge's shares. Bunge replied, saying it has no intention to increase its bid: "Despite the effect of unprecedented turmoil in the equity markets on our companies' stocks, Bunge's board of directors and management continue to believe a merger with Corn Products as currently structured would deliver significant value." CPO is the the fourth-largest maker of high-fructose corn syrup in the U.S.
• Mixed bag for e-shopping. Online retailers say sales growth will slow this holiday season, but will still beat last year's by 15%. "Online retailers are resilient when it comes to the economy, but they're not immune," one industry official said, adding, "It's challenging to keep up those really high growth rates." On the other hand, the ease with which online shoppers can comparison shop and saving on gas could appeal to cash-strapped shoppers. Most retailers say they'll offer free shipping, although some are raising the minimum purchase requirement.
• Consumer spending dries up. MasterCard Advisors reported consumers slashed spending in October, especially on larger purchases, as the financial crisis made for lighter wallets and heavier economic worries. Michael McNamara, vice president at MasterCard Advisors, said 'the numbers for October are very negative across the board,' and in particular 'sales above $1,000 just aren't really moving.' Savings-conscious spenders helped fast food restaurant sales rise 1%. Lowlights: Home decor -20.6%. Electronics -19.9%. Women's apparel -18.2%.
• Lending rates ease, but still elevated. Three-month Libor fell 20 BPs to 2.51% today, down from 4.82% on Oct. 10. Still, the rate remains 151 BPs higher than the Fed's target of 1% - compared to its average spread of just 22 BPs. "Banks are cutting back, the economy is in a deepening recession and in that environment, I don't think banks are going to become a lot more willing to extend credit soon," Goldman Sachs economist Jan Hatzius said.
• CDS data less daunting than feared. Data released by the DTCC shows credit-default swap traders took out a net $22.7B of contracts on Italy's debt, $16.7B against Spain and $12.5B on Deutsche Bank (DB). Outstanding transactions total $33.6T, a smaller sum than many had estimated, which may ease concerns that the much-maligned instrument is at fault for much of the recent financial market volatility. "Far too much mistrust has been engendered by the lack of transparency," CreditSights' Brian Yelvington said. "There's still a lot here that's not captured. But it's a step in the right direction." For instance, outstanding contracts on Lehman debt were only $72B, while estimates ranged as high as $400B. After subtracting redundant trades, only $5.2B actually changed hands.
• FCC signs off on Sprint/Clearwire combo. The FCC approved Sprint's (S) acquisition of Clearwire (CLWR), a merger considered critical to Sprint's survival in the wireless market. The Justice Department must still sign off on the deal. Afterhours S +7.2%, CLWR +21.8%. Meanwhile, Sprint faces a class-action lawsuit over claims that it wrongly charged subscribers $1.2 billion in early-termination fees. Sprint called the "suit cynical and opportunistic."
• Diabetes drug delay. The FDA said it isn't satisfied with data supporting a once-weekly version of the diabetes drug Byetta, currently injected twice a day. The likelihood of a delay of the drug's introduction sent its developers Amylin (AMLN) plunging 25.8% and Alkermes (ALKS) down 9.8%.
• Factory Orders fell 2.5% in September, far worse than the -0.7% consensus. It was the second consecutive monthly decrease. Ex-transportation, orders were off 3.7%, the largest percent decrease since 1992.
• National chain store sales fell 1.2% in the four weeks of October vs. September, Redbook says, but gained 0.6% vs. a year ago. According to ICSC, chain-store sales rose 0.9% last week vs. a year ago and 0.6% vs. the week before. Consumers continued to spend on everyday items.

Earnings: Wednesday Before Open

• Agrium (AGU): Q3 EPS of $2.31 beats by $0.42. Revenue of $3.11B (+214.8%) vs. $2.24B. (PR)
• Ambac (ABK): Q3 EPS of -$7.81 misses by $7.31. Net mark-to-market losses on credit derivatives of $2.7B. Shares -19%. (PR)
• Aqua America (WTR): Q3 EPS of $0.26 beats by $0.01. Revenue of $177M (+7%) in-line. (PR)
• ArcelorMittal (MT): Q3 EPS of $2.79 misses by $1.22. Revenue of $35.2B (+37.9%) vs. $38.8B. "We remain optimistic about the industry's medium-term growth prospects, but it is appropriate to pause our growth strategy until we have a more settled economic outlook." Shares -16.2%. (PR)
• Becton Dickinson (BDX): FQ4 EPS of $1.13 beats by $0.02. Revenue of $1.84B (+11.2%) vs. $1.81B. (PR)
• CenterPoint Energy (CNP): Q3 EPS of $0.39 beats by $0.18. Revenue of $2.52B (+33.6%) vs. $2.1B. Shares (PR)
• Checkpoint Systems (CKP): Q3 EPS of $0.32 misses by $0.05. Revenue of $234M (+14.4%) vs. $245M. Sees full-year EPS of $1.21-1.27 vs. $1.34 and revenue of $920-935M vs. $966M. (PR)
• CMS Energy (CMS): Q3 EPS of $0.34 beats by $0.08. Revenue of $1.43B (+11.4%) vs. $1.34B. (PR)
• Cognizant Technology Solutions (CTSH): Q3 EPS of $0.40 beats by $0.03. Revenue of $735M (+7.2%) vs. $723M. (PR)
• Corinthian Colleges (COCO): FQ1 EPS of $0.07 in-line. Revenue of $290M (+18.4%) in-line. Student starts were 30,075 vs. 28,030 (+7.3%). (PR)
• Devon Energy (DVN): Q3 EPS of $3.09 beats by $0.03. Revenue of $5.98B (+116.4%) vs. $4.02B. Shares +1.2%. (PR)
• Dollar Thrifty Automotive (DTG): Q3 EPS of $0.89 beats by $0.29. Revenue of $501M (-4.1%) in-line. (PR)
• Domtar (UFS): Q3 EPS of $0.10 in-line. Revenue of $1.63B (-2.1%) in-line. "The depth and duration of the economic slowdown and the impact this may have on office employment and demand for our products are uncertain," company says. (PR)
• Donnelley & Sons (RRD): Q3 EPS of $0.87 beats by $0.01. Revenue of $2.86B (-1.6%) vs. $3.04B. (PR)
• Duke Energy (DUK): Q3 EPS of $0.33 misses by $0.12. Revenue of $3.51B (-4.9%) vs. $3.92B. Sees full-year EPS of $1.22 vs. $1.27. (PR)
• El Paso Electric (EE): Q3 EPS of $0.74 misses by $0.06. Revenue of $153M (+1.5%) vs. $298M. (PR)
• Foster Wheeler (FWLT): Q3 EPS of $0.89 misses by $0.02. Revenue of $1.72B (+32.2%) in-line. (PR)
• General Growth Properties (GGP): Q3 FFO of $0.64 misses by $0.12. Revenue of $815M (+5.7%) vs. $865M. Sees full-year FFO of $2.85-2.95 vs. $3.31. (PR)
• Gerdau AmeriSteel (GNA): Q3 EPS of $0.73 beats by $0.09. Revenue of $2.51B (+80%) vs. $2.68B. (PR)
• Hospira (HSP): Q3 EPS of $0.63 in-line. Revenue of $925.5M (+10.4%) vs. $899M. (PR)
• IAC/InterActiveCorp (IACI): Q3 EPS of $0.25 beats by $0.09. Revenue of $369M (+10.1%) vs. $355M. (PR)
• Kimco Realty (KIM): Q3 FFO of $0.68 in-line. Sees full-year FFO of $2.20-2.45 vs. $2.68. (PR)
• Marsh & McLennan (MMC): Q3 EPS of $0.21 misses by $0.11. Revenue of $2.84B (+4.5%) in-line. (PR)
• Medco Health Solutions (MHS): Q3 EPS of $0.63 beats by $0.01. Revenue of $12.56B (+15%) in-line. (PR)
• MetroPCS Communications (PCS): Q3 EPS of $0.13 misses by $0.02. Revenue of $687M (+23.3%) vs. $711M. (PR)
• MF Global (MF): FQ2 EPS of $0.21 beats by $0.02. Revenue of $373M (-14.4%) vs. $367M. (PR)
• Molson (TAP): Q3 EPS of $0.95 misses by $0.01. Revenue of $921M (-45.3%) vs. $932M. (PR)
• Parker Drilling (PKD): Q3 EPS of $0.20 misses by $0.02. Revenue of $227.5M (+32.1%) vs. $233M. (PR)
• Polo Ralph Lauren (RL): FQ2 EPS of $1.58 beats by $0.33. Revenue of $1.43B (+10%) vs. $1.36B. (PR)
• PolyOne (POL): Q3 EPS of $0.13 beats by $0.03. Revenue of $735M (+10.6%) vs. $719M. "While our results for the third quarter were modestly better than anticipated, our fourth quarter earnings may fall short of our previous expectations." (PR)
• Radian Group (RDN): Q3 EPS of $0.46 vs. consensus of -$1.93. (PR)
• Quanta Services (PWR): Q3 EPS of $0.29 beats by $0.03. Revenue of $1.05B (+60.6%) in-line. (PR)
• Quicksilver Resources (KWK): Q3 EPS of $0.41 beats by $0.07. Revenue of $236M (+48.4%) vs. $228M. (PR)
• Sara Lee (SLE): FQ1 EPS of $0.32 beats by $0.09. Revenue of $3.35B (+9.7%) in-line. Sees full-year EPS of $0.77-0.84 vs. $0.96 and revenue of $13-13.3B vs. $13.89B. (PR)
• SkyWest (SKYW): Q3 EPS of $0.45 misses by $0.03. Revenue of $934M (+6.7%) in-line. (PR)
• Time Warner (TWX): Q3 EPS of $0.30 beats by $0.03. Revenue of $11.71B (+0.3%) vs. $11.9B. (PR)
• Time Warner Cable (TWC): Q3 EPS of $0.31 beats by $0.03. Revenue of $4.34B (+8.5%) in-line. (PR)
• Total (TOT): Q3 profit of €4.07B vs. €3.85B consensus. EPS of €1.81 vs. €1.32 a year ago. Despite crude's recent fall, Total expects higher oil prices in the medium to long term. (Bloomberg)
• Transocean (RIG): Q3 EPS of $3.44 misses by $0.05. Revenue of $3.19B (+107.5%) in-line. (PR)
• United States Cellular (USM): Q3 EPS of $1.02 beats by $0.37. Revenue of $1.09B (+7.5%) in-line. (PR)
• XTO Energy (XTO): Q3 EPS of $1.00 beats by $0.02. Revenue of $2.13B (+49.5%) in-line. Shares -0.7%. (PR)

Earnings: Tuesday After Close

• Blue Nile (NILE): Q3 EPS of $0.15 misses by $0.01. Revenue of $67.4M vs. $68.8M. Shares -12.5%. (PR)
• BRE Properties (BRE): Q3 FFO of $0.72 beats by $0.03. Revenue of $89.4M (+7.5%) vs. $86.1M. Shares +2.4%. (PR)
• D.R. Horton (DHI): Sees FQ4 home sales revenue of $1.5B vs. $1.59B consensus, and net loss of $800-900M. Sees land impairment charges of $1.1B. "Market conditions in the homebuilding industry deteriorated during our fourth fiscal quarter and October, characterized by rising foreclosures, high inventory levels of both new and existing homes and reduced liquidity in the mortgage markets." Shares +3.7%. (PR)
• HealthSouth (HLS): Q3 EPS of $0.15 beats by $0.08. Revenue of $456M (+6.5%) in-line. Shares +10%. (PR)
• Jack Henry & Associates (JKHY): FQ1 EPS of $0.26 misses by $0.01. Revenue of $183M (+4.7%) vs. $187M. Shares -0.8%. (PR)
• Pioneer Natural Resources (PXD): Q3 EPS of $0.91 misses by $0.30. Revenue of $612M (+33.4%) vs. $664M. Shares -10.4%. (PR)
• The Andersons (ANDE): Q3 EPS of $0.70 beats by $0.06. Revenue of $906M (+63.6%) vs. $806M. Shares +0.4%. (PR)
• Ultra Petroleum (UPL): Q3 EPS of $0.78 beats by $0.07. Revenue of $298M (+153.9%) in-line. Shares +2.1%. (PR)
• USEC (USU): Q3 EPS of $0.06 in-line. Revenue of $590M (-7%) vs. $463M. Shares -6%. (PR)
• Ventas (VTR): Q3 FFO of $0.69 misses by $0.02. Revenue of $125M (+5.2%) vs. $121M. (PR)
• Weight Watchers (WTW): Q3 EPS of $0.70 beats by $0.03. Revenue of $353M (+4.5%) in-line. Shares +5.9%. (PR)
• Yamana Gold (AUY): Q3 EPS of $0.05 misses by $0.05. Revenue of $247M (+23.9%) vs. $317M. (PR)

Today's Markets

• Asia markets were mainly higher. Nikkei +4.46% to 9,521. Hang Seng +3.17% to 14,840. Shanghai +3.16% to 1,761. BSE Sensex -4.81% to 10,120.
• In Europe, markets are lower at midday. London -1.45%. Paris -2.1%. Frankfurt -1%.
• U.S. futures are down. Dow -0.8%. S&P -1.1%. Nasdaq -1%. Crude -2.5% to $68.73. Gold +0.5% to $761.

Wednesday's Economic Calendar

• 7:00 MBA Mortgage Applications
  7:30 Challenger Job-Cut Report
  8:15 ADP Jobs Report
  10:00 ISM Non-Manufacturing Survey
  10:35 EIA Petroleum Status
• Notable earnings before Wednesday's open: ABK, AGU, BBG, BDX, CHB, CMS, CNP, COCO, CSE, CTSH, DLR, DUK, DVN, FWLT, GGP, GNA, HSP, IACI, KIM, KWK, MBI, MF, MHS, MMC, PCS, PKD, PWR, RAS, RDN, RIG, RL, RRD, SLE, SVR, TAP, TWC, TWX, UFS, WTR, XTO
• Notable earnings after Wednesday's close: AHT, ATVI, AVB, BDN, BEE, BEXP, CCI, CDNS, CECO, CEDC, CNO, CSCO, DOX, EGLE, EXM, GDP, GXP, HTZ, KEG, LEAP, MDR, NWS, OKE, PVA, SCI, SHO, SUN, SVNT, THQI, TWTC, URS, VMC, WFMI, XCO

Seeking Alpha editor Rachael Granby contributed to this post.

RBC Capital has released a list of stocks on the S&P/TSX Composite Index it claims will have the most “predictable” positive performance.

“Predictability factors tend to perform well during low earnings growth environments or periods of high market volatility,” RBC analyst Chad McAlpine said in a note on Wednesday. The list was produced using RBC's proprietary computer models and boasts “defensive, high-quality names ... they offer strong growth profiles at attractive valuations,” he said.

Q2 2008 Earnings Call Transcript

August 6, 2008 3:00 pm ET

By Tom Vulcan

Some things have not changed over the last couple of hundred years.

If you've got a classic motorbike, say, a Harley-Davidson, you can be sure it'll have some pretty spiffy chrome plating on it, whether it's on the pipes, front forks or handlebars. And then there are the myriad different wheels you can get for your motor. They'll very likely have chrome on them somewhere.

Last month I wrote about the pricing power that many US based steel firms had. I also posted how the weak US dollar and low inventory levels would lead to above average returns for my steel focus list. Here are those steel firms and their price increases since May 2:

• Gerdau Ameristeel (GNA): 23%
• Steel Dynamics (STLD): 20%
• Reliance Steel (RS): 23%
• Commercial Metals (CMC): 28%
• Insteel Industries (IIIN):  43%
• Universal Stainless (USAP): 9%

That's an average return of over 24%, while the S&P is down over 5% over the same time period. With an annualized return of 144%, one would be a pig not to some take profits; I have sold my position in GNA, but have added to my USAP position.

When investing, I cannot stress enough the importance of finding sectors that are doing well within the overall market. This does not mean that diversification is not important as that is the only way to protect yourself from downside in the market place.

With respect to sectors, steel looks very attractive, even at these valuations. Many investors believe that with the strengthening dollar that steel pricing could suffer as the dollar rebounds. In some cases this would be true, but it is not applicable if there is pricing strength derived from overall demand.

As the US economy continues to slow, the domestic steel industry continues to accelerate. My article on March 9th, gave investors a quick industry overview, and my steel stock focus list. After listening to the steel firms conference calls, and reading their earnings reports, I have changed my focus list, The two foreign companies: PKX and GGB, have been replaced with two domestics: GNA and STLD. My new focus list is:

Gerdau Ameristeel (GNA): Infrastructure, mining, commercial, rail
Steel Dynamics (STLD): Recycle, Infrastructure, fabrication
Reliance Steel (RS): Aerospace, fabrication, farm, wind power
Commercial Metals (CMC): Recycle, infrastructure, Europe
Insteel Industries (IIIN): Concrete, Infrastructure, bridges
Universal Stainless (USAP): Power generation, aerospace, oil/gas, tools

Gerdau Ameristeel Corp. (GNA) shares jumped more than 8% in Wednesday morning trading after the company reported record-setting earnings for 2007.

Gerdau said net income reached $141.4-million or $0.37 per share fully diluted for the three months ended December 31, 2007. That represents a year-over-year 112% increase versus the company's 2006 fourth quarter net income of $66.7-million or $0.22 per share fully diluted, for the three months ended December 31, 2006.

Toronto-based steel producer Gerdau Ameristeel said late Tuesday it will acquire Chaparral Steel for $4.22 billion, or $86/share -- a 14% premium to its $75.69 Tuesday close. The deal is an attempt by Gerdau, which is 67%-owned by Brazil's Gerdau AS, to diversify its product offerings. Chaparral is the number-two maker of structural steel beams in North America; it is also a major producer of steel bars and a recycling company. The acquisition will boost Gerdau's production of the steel used in office buildings and bridges -- which are in heavy demand due to a surge in infrastructure spending and a strong commercial real estate market -- by about 33%. Chaparral said in April it was exploring strategic options, including a possible sale, and that it hired Goldman Sachs to advise it. JP Morgan Chase is advising Gerdau and has promised financing of $4.6 billion. UBS analyst Edmo Chagas criticized the deal: "We believe the acquisition is expensive and slightly negative for Gerdau," he wrote in a research note. Chaparral shares were up 71% YTD, and 20% since it put itself on the block.

Texas Instruments (TXN)
National Semiconductor (NSM)
Intel (INTC):'.... trades to $27.'
Halliburton (HAL):'It's cheaper. It's better. It's up 6 quick ones, but I like it!'
Gerdau AmeriSteel (GNA): 'But GNA?... which is a companion of a Brazilian steel company... way up! '
US Steel (X)
Allegheny Technologies (ATI)
Sears holdings (SHLD): 'It's up 12% on the year total. It's been a remarkable win. I think that SHLD, more than any other company domestically, could be the next Berkshire Hathaway ... I am urging patience. I don't want people to quit SHLD.'
Brookfield Asset Management (BAM)
PepsiCo (PEP): 'the case of Pepsi - I'd rather be in PEP than Pepsi Bottling Group. It just happens to be my predilection, because I just like to own the parent.'
Smith & Wesson (SWHC): 'I wish I hadn't left the table. SWHC is cheap on growth prospects. Who knows? They get a government contract, and it could be 'to the moon, Alice!' I stand corrected.'
Apple (AAPL): 'The stock has a sudden spike up, and then you've got to let some go again. Let it come back. Three months from now, AAPL will be still higher, because that company knows the industries, and knows how to dominate..'
Caterpillar (CAT)

Great Lakes Dredge & Dock (GLDD): 'I bet it does great! GLDD - I'm giving it a thumb and a half up... '
Gerdau AmeriSteel (GNA)
Allegheny Technologies (ATI): ' ... you are getting a chance to buy that stock 12 points below where I think it should be!'
Reliance Steel (RS)
Halliburton (HAL): 'Its stock is so cheap versus the rest... much lower than its 52-week high of last year.'
Air Products & Chemicals (APD): 'Now that... APD is one of the best-run companies... That is precisely the kind of company you want to own in this environment ... I think you could tack on 20 more points, before that stock got too expensive.'
Celgene (CELG): 'Oh man... How great is Bob Hugin?'
PetSmart (PETM): 'That's a real good company ... PETM is one of the few retailers that I'm still recommending.'
GameStop (GME)
Sears Holdings (SHLD)
OptionsXpress (OXPS): 'OXPS is one of the cheapest brokerage stocks. Tomorrow, Goldman Sachs reports, and I'm counting on that stock to be good.'
Jack in the Box (JBX): 'JBX is one of the best chains on earth!...JBX is money in the bank!'
Chipotle Mexican Grill (CMG)
Steel Dynamics (STLD)
Dynegy (DYN): 'If we're going to go down and dirty spec, I come back with Dynegy, which has just been so heavy, because of the big Chevron dump.'
C0rning (GLW): 'That's a diesel play! That's a clean play!... '

She has also initiated coverage of Stelco Inc. [STE:TSX] with an “underperform” rating and CAD$20 target price, Algoma Steel Inc. [AGA:TSX] with an “outperform” rating and CAD$40 target price, and Gerdau Ameristeel Corp. (GNA) with an “outperform” rating and USD $12 target price.

Incorporated in 1970, the company operates through two main businesses; Minimills and Downstream Operations. Through these businesses GNA operates 17 electric steel mills, 17 scrap recycling facilities and 46 downstream operations. Its main product, reinforcing steel, is used by a broad range of clientèle that includes industrial builders, building contractors and commercial clients. With operations and facilities in Louisiana, South Carolina, Arkansas, Ohio and Minnesota, the company had established a foundation in the industry long before its spin-off.

Lofty Aspirations
GNA has the current goal of becoming the most successful company in the steel production industry. In recent news, the firm has decided to take a step towards this goal by improving its downstream operations. In November of last year, it entered into a joint venture with Pacific Coast Steel, Inc. and affiliate Bay Area Reinforcing to create Pacific Coast Steel. With a controlling interest in the firm, GNA will expand its reinforcing steel reach into the west coast, with planned projects throughout California and Nevada. This comes after a mid-year acquisition of the Oklahoma mini-mill producer of long steel products, Sheffield Steel Corporation.

The steel industry as a whole is predicted to see some decline in 2007 but the factors affecting this decline may never touch GNA. The main problems confronting the sector include a decline in the automotive and residential industries, and predicted slower growth of the overall U.S. economy. Non-residential construction is seen, by industry analysts, as the sole point that steel companies can bet on.