Wednesday, September 8, 2010

Bank of America (NYSE:BAC) Recommends US Steel (NYSE:X)

The steel industry has been on a tear the last couple of days as a series of announcements has created a short-term boost to the industry, with US Steel (NYSE:X) seeming to be one of the favorites in the sector, as Bank of America (NYSE:BAC) recommended investors to buy shares in the steelmaker.

One other temporary factor which has yet to be confirmed in any way, was the rumors US Steel is a candidate for acquisition. No information was offered as to who had an interest when the rumors were circulating.

A couple other factors were ArcelorMittal's (NYSE:MT) announcement they're raising prices, China's growth rate, possible infrastructure projects domestically, and in China's rural areas as well.

The China growth aspect came from PMI numbers suggesting they're growing fast than thought in the recent past.

In the short term China has also decided to shutter its steel plants for two weeks to shrink its steel supply.

Pricing power over the next couple of months is expected to increase, making it a good play in the eyes of Bank of America.

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