Sep. 15, 2014, 8:49 AM
- Nucor (NYSE:NUE) agrees to acquire the Gallatin Steel business from ArcelorMittal (NYSE:MT) and Gerdau (NYSE:GGB) for ~$770M.
- NUE says adding the Gallatin flat-rolled products mill in Kentucky, with an annual capacity of ~1.8M tons, will broaden its footprint in the U.S. midwest and will increase its total flat-rolled product annual capacity by 16% to ~13M tons.
- NUE expects the deal to be immediately accretive to cash flow and accretive to earnings after working through purchase accounting-valued finished goods inventories.
- MT and GGB each owned 50% interests in Gallatin.
- NUE +0.9%, MT -0.5% premarket.
Sep. 3, 2014, 12:36 PM
- U.S. Steel (X +2.7%) remains solidly higher on the day after Morgan Stanley named it a top pick, and is now up by a third YTD; most steel peers also are higher, with MT +2.7%, STLD +2.5%, NUE +2.2%, CMC +2.2%, but AKS -4.8% after guiding Q3 earnings below consensus.
- Axiom Capital’s Gordon Johnson admits he’s been wrong on U.S. Steel this year, but he stands by his bearish call, noting that what really got the stock going was guidance for Q3 pointing to ~$1/share in GAAP EPS.
- Johnson thinks the optimism is not realistic and sees 10%-15% downside to U.S. HRC spot prices as likely before year-end 2014 and noting the inherent volatility in the company's earnings to shifts in U.S. HRC spot prices, elevated by resiliency in U.S. HRC spot prices (-1.2% YTD), despite the fall in both iron ore (-35% YTD) and coking coal prices (-21% YTD).
Sep. 3, 2014, 9:13 AM
- U.S. Steel (NYSE:X) +2.7% premarket as Morgan Stanley upgrades its view on the steel sector to Attractive while raising its price target for X, the firm's top pick in the sector, to $60 from $35 with a bull case for $87.
- Stanley sees the steel industry benefiting from both structural and cyclical improvements, and likes U.S. Steel's compelling company-specific cost-cutting initiative; the firm also thinks X is getting ready to walk away from its loss-making Canadian operations.
- Shares also may be getting a lift because of its exposure to favorable headlines out of eastern Europe: US Steel Europe, representing 17% of overall revenue, includes a steel plant and coke production facilities in Slovakia.
- ArcelorMittal (NYSE:MT), with a strong presence in the area, also +2.7%; the other U.S. steel producers - AKS, CMC, NUE, STLD - have less exposure to the region and are little changed premarket.
Sep. 3, 2014, 7:43 AM
- The U.S. Department of Commerce has set preliminary duties of up to 110% on imports of carbon and alloy steel wire rods from China following a ruling that found the products being sold below cost in the U.S.
- The complaint regarding the imports, which totaled $313M in 2013, was made by several firms including ArcelorMittal (NYSE:MT), Keystone Consolidated (OTC:KYCN) and Nucor (NYSE:NUE).
- A final decision by the Department of Commerce is due by Nov. 12. The U.S. International Trade Commission will make its final decision in December.
Aug. 28, 2014, 2:25 PM
- Concerns about falling iron ore prices are sending global miners and steel companies sharply lower: CLF -5.8%, SID -5.7%, VALE -4.4%, RIO -3.9%, X -3.9%, BHP -2.5%, ANR -2.5%, MT -2.4%.
- There’s too much supply of iron ore and prices will continue to fall further, deepening a slump that has hurt profits at the biggest miners, according to the head of Austria’s largest steelmaker.
- Iron ore prices fell to their lowest level in five years today to $87.30/ton, the lowest since 2009; Voestalpine CEO Wolfgang Eder sees prices at $90-$100/ton for the rest of 2014 before settling at $80-$90 in the medium term.
Aug. 26, 2014, 9:11 AM
Aug. 14, 2014, 2:33 PM
- ArcelorMittal (MT -0.2%) has sent a non-binding expression of interest for troubled Italian steelmaker Ilva, trade union sources tell Reuters.
- Ilva runs Europe's biggest steel plant in the southern Italian city of Taranto but has been at the center of an environmental scandal.
- MT, which previously said it was invited by the government to look at the plant, says it will make a move only if confident the deal would be good for its business in Europe and create value.
Aug. 8, 2014, 2:18 PM
- ArcelorMittal (MT +0.2%) says contractors working on an expansion project in Liberia had started moving personnel out of the country due to the Ebola virus outbreak in west Africa.
- MT is working on an expansion project to increase iron ore shipments from Yekepa and Buchanan to 15M tons/year from 5M currently.
- The steel producer says it remains committed to Liberia, and would continue to ship iron ore from the country.
Aug. 1, 2014, 9:15 AM
Aug. 1, 2014, 7:59 AM
- ArcelorMittal (NYSE:MT) -6.3% premarket after reporting below consensus Q2 earnings and warning it will miss its target for full-year earnings, as shipments are being hit by lower commodity prices.
- MT says FY 2014 EBITDA likely would total more than $7B, below a previous forecast of ~$8B, reflecting a probable average iron ore price of $105/metric ton for this year vs. prior expectations for $120.
- While the softening of iron ore prices may hurt MT's relatively small mining segment, the result could be countered by stronger demand for the steel that makes up most of the company’s business.
- Also, MT agrees to acquire a near 50% effective stake in Guinea's Mount Nimba iron ore project, buying out shareholders BHP and Areva for an undisclosed sum; the high-quality deposit is 40 km from MT's existing Liberian iron ore mine, which means the steelmaker could take advantage of its existing rail and port infrastructure in Liberia to lower development costs.
Aug. 1, 2014, 6:25 AM
Jul. 31, 2014, 5:30 PM
Jul. 31, 2014, 12:17 PM
- ArcelorMittal (MT -2.7%) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY) are among potential bidders for Guinea’s Simandou project, the world’s largest untapped iron ore deposit, Bloomberg reports.
- MT has sought to expand its own iron ore business to cut reliance on mining companies for the steelmaking ingredient; it operates an iron ore mine in neighboring Liberia and is in talks with BHP about gaining a stake in the Nimba mine in Guinea.
- In April, Guinea's government revoked rights to half the Simandou project controlled by a venture between Israeli billionaire Beny Steinmetz and Brazil’s Vale, following claims of bribery and corruption.
Jun. 27, 2014, 2:39 PM
- Glencore (GLCNF, GLNCY) has told the government of Guinea that it is interested in rights to develop the northern concession of the Simandou project, one of the world's most sought-after iron ore deposits, WSJ reports.
- BHP Billiton (BHP) and Arcelor Mittal (MT) also reportedly have notified Guinea that they could be interested in taking part in a tender.
- Glencore has little exposure to iron ore, but has said it isn't seeking out the kind of long-term investment required by Simandou, which would require billions of dollars in investment before making a profit.
- Earlier this year, the government revoked the license previously held by Vale (VALE) and BSG Resources, alleging BSG obtained the rights through corruption; Simandou's southern concession is being developed by a consortium led by Rio Tinto (RIO).
Jun. 16, 2014, 3:28 PM
- ArcelorMittal (MT -0.8%) sees its path forward in China through downstream products, as it prepares today to open a new automotive steel plant there that promises higher margins on one of the few types of steel not in oversupply in the country, FT reports.
- China currently imports 1.5M-2M metric tons/year of automotive steel to meet a market growing by ~10%/year, and the expected output of ~1.5M metric tons/year at the new Loudi mill aims to displace most of those imports.
Jun. 12, 2014, 8:28 AM
- Morgan Stanley cuts its iron ore price estimate for this year and foresees a further drop in 2015, as a seaborne surplus grows faster than expected and the level of cost support at Chinese producers declines.
- Prices are expected to average $105/ton this year vs. $118 forecast in May and $135 in 2013, and average ~$90/ton in 2015, 21% below an earlier estimate.
- Iron ore has dropped below $92 for the first time since 2012 as mining companies boost output, betting that rising exports to China would more than offset lower prices.
- The firm downgrades Vale to Equal Weight from Overweight with a $15.20 price target.
- RIO -2.9%, CLF -2.8%, VALE -1.3%, BHP -1.2%, MT -1.2% premarket.
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