Oct. 28, 2014, 5:01 PM
Oct. 21, 2014, 12:34 PM
- The U.S. says it will terminate a 15-year-old deal sheltering Russian flat-rolled steel producers from high import duties, and anti-dumping duties will apply beginning Dec. 16.
- U.S. steel producers, including U.S. Steel (X +5%) and Nucor (NUE +2.2%), complained to the Commerce Department in July that the reference price set in a 1999 agreement, which also set a cap on imports, had been below U.S. market prices since 2004.
- However, J.P. Morgan analysts see no reason for buying steel stocks (NYSEARCA:SLX), saying the move impacts only 1.4% of U.S. market share; in fact, the firm suggests shorting steel stocks on the "misinterpretation" of duties on Russian imports of hot rolled steel.
- Other steels also are higher: AKS +3.9%, MT +3.6%, CMC +2.3%, STLD +1.7%.
Oct. 8, 2014, 5:54 PM
- The restructuring of U.S. Steel Canada (NYSE:X) will go ahead, with its parent company providing $185M in financing to support the Canadian unit through the end of next year, after winning approval from the Ontario Superior Court to receive debtor-in-possession financing.
- Not all parties and creditors that had raised objections to the structure of the DIP facility give consent, but they choose not to object in the interest of the stability of the company's operations in Canada.
Oct. 2, 2014, 3:23 PM
- U.S. Steel (X -0.1%) is downgraded to Hold from Buy at KeyBanc, which expects the company to report a loss of $0.44/share for FY 2014, down from previous estimates of a $0.34 loss, and FY 2015 earnings of $1/share, down from an earlier forecast of $1.30.
- KeyBanc says it appreciates the company's ongoing long-term turnaround potential via Project Carnegie, balance sheet recovery, recent de-consolidation of its Canadian operations, and recovery in the Tubular market, but X shares should remain rangebound amid recent declines in seaborne iron ore prices and the firm's expectation for weaker than previously modeled U.S. sheet prices in 2015.
- The firm is more positive on electric arc furnace steel producers Steel Dynamics (STLD +0.6%) and Nucor (NUE -0.6%), which should benefit from the likelihood of future declines in ferrous scrap costs relative to iron ore.
Sep. 24, 2014, 5:04 AM
- U.S. Steel's (NYSE:X) Canadian subsidiary is looking to quickly put up its Hamilton assets for sale and auction off its operations on Lake Erie, after filing for protection from its creditors last week.
- The restructuring could affect more than 14K retirees who depend on U.S. Steel pensions. The Canada unit has a pension fund deficit of more than $750M.
Sep. 18, 2014, 3:21 PM
- In the doldrums not long ago, steel stocks are now among the hottest in the market; in the last three months, X +81%, STLD +37%, AKS +30%, NUE +12%.
- Steel Dynamics (STLD +0.6%) was the latest to report a strong summer, guiding for above-consensus Q3 earnings as shipments and metal spreads are forecast to improve in spite of continued elevated import activity; Nucor did so yesterday morning (NUE +0.4%).
- Still, Credit Suisse is not ready to embrace the steel company revival, at least when it comes to AK Steel (AKS -4.8%), whose self-help story has less scope for upside surprise than US Steel (X +0.2%); one obvious contrast is that X is looking at shutting down blast furnace steelmaking capacity in North America, while AKS is buying more of it.
- ETF: SLX.
Sep. 17, 2014, 4:40 PM
- Steel Dynamics (NASDAQ:STLD) +2.4% AH after guiding Q3 EPS of $0.42-$0.46, substantially above Q2 results and ahead of analyst consensus estimate of $0.38, as STLD expects shipments and metal spreads to improve across the steel operating platform despite continued elevated import activity.
- STLD says demand trends for key steel-consuming end markets is expected to remain favorable, as strength in automotive, manufacturing, energy and construction markets continues to improve.
- The strong guidance follows optimistic outlooks from U.S. Steel (NYSE:X) and Nucor (NYSE:NUE).
Sep. 17, 2014, 10:51 AM
- U.S. Steel (X +8.8%) is recommended with a Buy rating and a $58 price target, raised from $47, at Goldman Sachs following the announcement of accelerated restructuring measures.
- Goldman sees the decision to ring-fence its consistently unprofitable Canadian operations as value enhancing, reducing its underfunded pension and OPEB liabilities by 40%; the decision to cancel the expansion of the Keetac iron ore mine makes sense in light of the state of iron ore prices and deteriorating fundamentals.
- The firm believes the benefits of the positive transformation at the company level are magnified by the structural story in the North American flat rolled steel market, allowing the U.S. producers to maintain a higher premium over global prices.
Sep. 17, 2014, 9:15 AM
Sep. 17, 2014, 8:52 AM
- Nucor (NYSE:NUE) +4.4% premarket after raising Q3 earnings guidance substantially, now seeing EPS of $0.70-$0.75 vs. analyst consensus estimate of $0.62; guidance includes a $0.02 charge related to the partial writedown of some assets.
- NUE expects much improved overall operating performance at its steel mills in Q3, seeing increased profitability in sheet, structural, bar and plate steel.
- Structural steel had no major outages in Q3, compared to the planned three week outage at Nucor-Yamato Steel in Q2.
- Says imports remain at high levels, applying downward pressure on pricing.
- The news follows a strong Q3 outlook from U.S. Steel; X +12.8%, AKS +5.7%, STLD +2.3% premarket.
Sep. 16, 2014, 6:39 PM
- U.S. Steel (NYSE:X) +6.8% AH after updating its Q3 outlook and saying it expects a significant improvement in operating income, and Q3 earnings will come in significantly higher than current consensus estimates.
- The company announces three key strategic actions: It will not proceed with an expansion at its iron ore pellet operations in Keewatin, will forgo further development and construction of the carbon alloy facilities at Gary Works, and will apply for relief for U. S. Steel Canada from its creditors and will be deconsolidated from U.S. Steel's financial statements.
- The estimated capital investment that would have been required to complete these projects was more than $800M; the company estimates the strategic actions will result in total charges of $550M-$600M.
Sep. 10, 2014, 2:34 PM
- The U.S. Commerce Department has announced that Turkey has not been dumping rebar and will not impose duties on it, and Axiom Capital thinks it is bad news for U.S. Steel (X -0.7%).
- Axiom says it is difficult to imagine U.S. steel mills successfully arguing that dumping is occurring against the current macro backdrop when U.S. HRC spot prices are sitting at a $93, $63 and $18 premium to Chinese, EU and Turkey HRC spot prices.
- The firm continues to believe the rally in U.S. Steel is based several misconceptions by the market (earlier).
- A group of five U.S.-based steel producers, including Nucor (NUE -0.9%) and Commercial Metals (CMC -2%), sued last year, accusing Turkey and Mexico of essentially undercutting U.S. prices to grab sales and market share; the U.S. confirmed duties on Mexican material of up to 66.7%.
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.
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. 27, 2014, 2:58 PM
- The U.S. will not go ahead with planned import duties on specialized steel from Japan, Germany and Poland after the U.S. International Trade Commission found the imports were not harming local industry.
- The U.S.-based public affairs lobby of the Japanese steel industry welcomes the decision, which came after a complaint lodged by AK Steel (AKS -2.9%) and others.
- The decision affects companies including Nippon Steel & Sumitomo Metal (OTC:NISTF) and Germany's ThyssenKrupp (OTC:TYEKY, OTCPK:TYEKF), which had been named in the dispute.
- Also: X -1.1%, STLD -0.4%, WOR -0.6%.
- ETF: SLX
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