Tue, Jan. 27, 9:58 AM
- Nucor (NUE -1.4%) opens lower even after Q4 earnings of $0.68 came in above last month's company guidance of $0.53-$0.58/share; both the $0.68 and the guidance exclude a $0.03 charge related to a partial asset writedown.
- NUE says Q4 average selling prices rose 1% and total steel mills shipments rose 2%.
- NUE expects Q1 earnings will decrease from Q4 to a level slightly exceeding Q1 2014, with market conditions in the steel mills segment impacted by challenges in energy markets due to customer inventory reductions caused by lower oil prices; expects improvement in energy demand once inventory destocking is complete.
- Says production at the Louisiana operation remains suspended amid repairs, and adds that the business will notbe operational until late in the current quarter.
Tue, Jan. 27, 9:06 AM
Mon, Jan. 26, 6:10 PM
- U.S. Steel (NYSE:X) says it will temporarily curtail operations at two plants in Alabama and one in Texas that sell steel pipes and tubular products to oil and gas drillers, potentially affecting more than 1,900 workers.
- Earlier this month, U.S. Steel said it would idle plants in Ohio and Texas, and possibly lay off up to 756 workers.
- The fall in oil prices could decimate an entire industry that has been built up in recent years to supply drilling in places such as the Marcellus Shale and the Gulf of Mexico; “There’s still millions of tons of capacity set to come online, and it’s just going to be too much," says one analyst.
- Other steelmakers with key U.S. operations include NUE, STLD, MT and AKS.
Mon, Jan. 26, 5:30 PM
Mon, Jan. 26, 12:29 PM
- With just a week of bargaining left until the national contract for U.S. refinery workers expires, talks over a new agreement between the United Steelworkers union and lead oil company negotiator Royal Dutch Shell (RDS.A, RDS.B) appear to be making little progress.
- The USW rejected the first industry proposal on Friday, calling it "inadequate and offensive."
- The union is seeking annual pay raises double those of the last agreement, and wants work given to non-union contractors to go to USW members.
- Reltaed steel tickers: X, AKS, NUE, STLD, CMC, ATI
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
Thu, Jan. 15, 3:59 PM
- Barclays is bullish on steel producers thanks to improving U.S. steel demand that should offset the downward trend in steel pricing, neutral on copper miners as lower than expected metal supply will outweigh a slowdown in Chinese consumption growth, and cautious on coal as low nat gas prices along with growing utility regulations and slowing Chinese demand for imported coal will hurt demand.
- In steel, the firm's Overweight-rated steel stocks Nucor (NYSE:NUE) and Steel Dynamics (NASDAQ:STLD) stand to gain from steel consumption growth from the U.S. construction, manufacturing and automotive industries while offering little direct exposure to the troubled energy sector.
- In copper, both Southern Copper (NYSE:SCCO) and Freeport McMoRan (NYSE:FCX) boast high-probability mining expansion projects over the next two years, but Barclays considers pure-play SCCO's overall risk profile more favorable.
- In coal, Cloud Peak (NYSE:CLD) offers a relatively healthy balance sheet and reasonable valuation on realistic pricing, while Alpha Natural (NYSE:ANR) and Arch Coal (NYSE:ACI) struggle under heavy debt from ill-timed acquisitions exacerbated by very slim profitability.
Wed, Jan. 14, 12:39 PM
- Citi cuts price targets for iron ore to $58 for 2015 and $62 for 2016, down from its prior estimates of $65 for both years, and lowers its outlook for thermal and met coal.
- Citi warns its downwardly revised forecast means it now expects earnings for major mining companies will fall by 9%-21% for 2015 and by 3%-16% in 2016.
- Rio Tinto (RIO -2.5%) is the exception, as Citi sees earnings rising 7.1% this year and 10.6% next year due to the company’s greater exposure to the weaker Australian dollar.
- The firm cuts its price target for Glencore (OTCPK:GLCNF -7.2%) by 8% to £3.60 from £3.90 and sees earnings falling 21% and 16% respectively in 2015 and 2016.
- Citi says it is still bullish on the sector, but warns that metals and mining companies will only slowly grind higher over the next few years.
- Also: BHP -4.5%, VALE -5%, FCX -12%, SCCO -4.9%, TCK -9.7%, CLF -4.4%, CENX -9.1%, MT -4.2%, X -4.9%, NUE -3.4%, STLD -2.6%, BTU -9.8%, ANR -8.8%, ACI -8.9%.
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. 16, 2014, 9:19 AM
- Nucor (NYSE:NUE) -1.3% premarket after issuing downside guidance for Q4 earnings, seeing EPS of $0.50-$0.55 vs. $0.66 analyst consensus estimate.
- NUE expects Q4 operating performance at its steel mills segment and downstream products segment to decrease Q/Q due to typical end-of-year seasonality.
- NUE also says imports remain at exceptionally high levels, contributing to the downward pressure on the performance of the steel mills segment, which has experienced some margin compression vs. Q3 and a decrease in volume.
- In October, NUE projected a "moderate decrease" in Q4 earnings from Q3's $0.76/share.
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.
Dec. 5, 2014, 2:36 PM
- U.S. Steel (X +0.7%) depends on U.S. oil producers for a big chunk of its profits, prompting some analyst warnings of potential trouble ahead for the company.
- Axiom Capital's Gordon Johnson, for one, says that when oil prices in 2009 were at today's levels, U.S. Steel’s tubular business saw a contraction in overall rig counts and began generating negative operating margins.
- Morgan Stanley’s Evan Kurtz, however, sees upside for Steel Dynamics (STLD +0.2%) as consensus begins to incorporate lower scrap costs.
- Also: MT +0.6%, AKS -0.7%, NUE -0.7%,
Dec. 3, 2014, 12:21 PM
Nov. 19, 2014, 12:26 PM
- Iron ore prices extend their historic decline, approaching $70/dry ton in a retreat to the lowest level in more than five years, as analysts rule out any Chinese restocking that typically supports prices towards the end of each year.
- The price is now at a level at which all but the three biggest low-cost producers - Rio Tinto (RIO -2.4%), BHP Billiton (BHP -3%) and Fortescue (OTCPK:FSUMF -8.8%) - are either generating losses or are struggling to break even.
- Steel stocks also are getting whacked: SCHN -5.4%, X -4%, PKX -3%, AKS -3%, CMC -2.7%, STLD -2.5%, NUE -1.6%, MT -1.3%.
Nov. 14, 2014, 2:57 PM
- The Commerce Department confirms steep duties on imports of carbon and alloy steel wire rod from China after ruling the products were being sold below cost in the U.S. market and received unfair levels of government subsidies.
- The complaint about the imports from China, which totaled $313M in 2013, was made by Nucor (NUE +0.9%), ArcelorMittal (MT +2%) and others.
- The U.S. International Trade Commission will make its final decision by Dec. 26 on whether duties go ahead.
Oct. 31, 2014, 2:15 PM
- Cliffs Natural Resources (CLF +8.7%) spikes higher on a WSJ report that Nucor (NUE +1.2%) is in talks to invest in CLF’s Bloom Lake iron ore mine in Quebec.
- Two Japanese steel companies reportedly would also be part of the venture, which would allow CLF to more than double production at the mine to 13.5M tons/year; the three partners and another existing Japanese partner would buy the iron ore produced at the mine.
- The partnership apparently would allow CLF to make Broom Lake profitable, after taking a $6B writedown earlier this month mostly related to the mine.
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