Rob Black's Metals Market Roundup For April 26 (NUE, STLD, X)

Includes: NUE, STLD, X
by: Rob Black

Bear Stearns gold analyst raised his price assumptions in 2006 and 2007 to $580/oz and $625/oz.

United States Steel (NYSE:X) reported earnings from continuing operations of $2.08; these results exclude a one time charge of $0.04 related to an asset impairment. Earnings were above the consensus estimate of $1.48. The company reported $1.15 and $3.03 in the previous quarter and year ago periods respectively. Variance from estimates occurred due to stronger than anticipated price realizations.

It should be noted that the company has a scheduled maintenance outage at its tubular production facilities in the 2nd quarter 2006. This outage will have a material effect on volumes and product mix, but is not out of the ordinary, and they expect the operation to be back to full capacity in the 3rd quarter 2006.

US Steel provides another data point showing continued strength in the steel market. With imports acting well behaved, price increases being accepted by consumers and product discipline amongst producers, analysts remain optimistic about the names in the carbon steel sector -- US Steel (X), Steel Dynamics (NASDAQ:STLD) and Nucor (NYSE:NUE) -- but sense that shares could see a period of consolidation ahead.

Copper hit a record $3.40 a pound, fueled by huge demand from China, labor unrest in Mexico and fears of production slowdowns in Chile. This year, copper has soared 62%.The world economy has been growing strongly, and economic growth typically boosts demand for copper, which is used in plumbing, electronics and automobiles.