- Nucor (NUE -1.8%) slides as a Q3 drop in steel shipments from the previous quarter sparks concerns that the U.S. market may be oversupplied, undermining Pres. Trump's tariffs on imported steel.
- "There appears to be too much inventory in the channel right now, and this has impacted mill orders and volumes" in early Q4, says Longbow Research analyst Chris Olins.
- The imposition of the tariffs raised futures prices for U.S. hot-rolled coil steel from $660/ton in January to $924 at the start of June, but they have since fallen back to $834.
- "Hot rolled coil prices continue to grind lower and our channel checks suggest large size orders at $800/ton or below," says Credit Suisse analyst Curt Woodworth, who has previously downgraded the steel sector (SLX -2.8%) on concerns over a glut in U.S. supply.
- Analysts also worry that NUE's investments in new production plants, including a $240M rebar mill in Florida, and other steelmakers' plans to ramp up capacity will exacerbate oversupply.
- Other steel names also are trading in the red: X -1.4%, MT -2.6%, AKS -3.2%, CMC -1.2%, CLF -2.7%, RS -1.9%, WOR -3.3%, TS -2.1%, TMST -1.7%, SCHN -1.4%, ZEUS -2.2%.