Friday, November 5, 2010

Insteel Industries (Nasdaq:IIIN), Mechel OAO (NYSE:MTL), Universal Stainless (Nasdaq:USAP) Soar on Fed Inflation, Collapsing US Dollar

Insteel Industries Inc. (Nasdaq:IIIN), Mechel OAO (NYSE:MTL),
Universal Stainless & Alloy Pr (Nasdaq:USAP) all moved up with the broader commodity sector Thursday, as the reality the Federal Reserve was going to inflate again via its quantitative easing strategy pushed up the price of commodities in anticipation of the inevitable inflation to come.

Commodities moving up in price included gold, aluminum, silver and oil. Gold prices exploded record levels again, moving toward the $1,400 an ounce level. Silver pushed past the $26 mark, and is more than likely going to continue increasing for some time.

The steel industry overall may go through seasons of wide fluctuations as currencies sway in response to the drop in value of the U.S. dollar, which will affect margins because of the wide moves in currency value and the fight by some against the Chinese renminbi, which they'll be forced to take defensive measures against.

Taking into account market factors, and the general economic health of the steel industry , it more than likely won't partake in the surge in commodity prices and demand as other commodities will surely do.

Insteel Industries Inc. closed at $9.11 Thursday, rising $0.22, or 2.47 percent. Mechel OAO surged to close at $25.27, gaining $1.68, or 7.12 percent. Universal Stainless & Alloy Pr was up to $30.62 at the end of the trading session, gaining $1.03, or 3.48 percent.

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