IAMGOLD Corp (IAG), AK Steel Holding Co. (AKS), Chesapeake Energy (CHK), Copano Energy, L.L.C. (CPNO), Hess Corp (HES), ArcelorMittal (MT) and Exxon Mobil (XOM) had ratings on them adjusted by analysts.
Macquarie upgraded AK Steel Holding Co. (AKS) from an Underperform rating to a Neutral rating.
Stifel Nicolaus upgraded Chesapeake Energy (CHK) from a Hold rating to a Buy rating.
Societe Generale upgraded IAMGOLD Corp. (IAG) from a Sell rating to a Hold rating.
RBC Capital downgraded Copano Energy, L.L.C. (CPNO) from an Outperform rating to a Sector Perform rating.
Capital One downgraded Hess Corp. (HES) from an Add rating to a Neutral rating.
HSBC downgraded ArcelorMittal (MT) from a Neutral rating to an Underweight rating.
Macquarie downgraded Exxon Mobil (XOM) from an Outperform rating to a Neutral rating.
Showing posts with label AK Steel. Show all posts
Showing posts with label AK Steel. Show all posts
Wednesday, January 30, 2013
Monday, September 24, 2012
Chevron (CVX), (FSM), (AKS), (BTU), (TLM) (WLT) (DRQ) Ratings Changes
Ratings on shares of Chevron (CVX), Dril-Quip (DRQ), AK Steel Holding Co. (AKS), Peabody Energy Corp. (BTU), Fortuna Silver Mines (FSM), Talisman Energy (TLM), Walter Energy (WLT) and U.S. Steel (X) were adjusted by analysts.
Howard Weil upgraded shares of Chevron (CVX) from a "Market Perform" rating to an "Outperform" rating. They have a price target of $135.00 on the company.
ISI Group upgraded Dril-Quip (DRQ) from a "Hold" rating to a "Buy" rating.
Citigroup (C) downgraded AK Steel Holding Co. (AKS) from a "Neutral" rating to a "Sell" rating. They lowered their price from $5.50 to $3.50 on the company.
Bank of America (BAC) downgraded Peabody Energy Corp. (BTU) from a "Buy" rating to an "Underperform" rating. They lowered their price target from $32.00 to $22.00 on the company.
Dundee Securities downgraded Fortuna Silver Mines (FSM) from a "Buy" rating to a "Neutral" rating.
Credit Suisse (CS) downgraded Talisman Energy (TLM) from an "Outperform" rating to a "Neutral"rating.
Bank of America Walter Energy (WLT) Buy Neutral $45.00 $37.00
Citigroup U.S. Steel (X) Buy Neutral $30.00 $23.00
Friday, September 14, 2012
Trina (TSL) (AKS) (KGI) (RIG) (EPL) Ratings Changes
Trina Solar (TSL), AK Steel Holding Co. (AKS), Kirkland Lake Gold Inc. (KGI), Transocean (RIG) and Energy Partners, Ltd. (EPL) had ratings on them changed or initiated by analysts.
Credit Agricole downgraded AK Steel Holding Co. (AKS) from an "Underperform" rating to a "Sell" rating.
CIBC downgraded Kirkland Lake Gold Inc. (KGI) from an "Outperform" rating to a "Sector Perform" rating.
Guggenheim downgraded Transocean (RIG) from a "Buy" rating to a "Neutral" rating. They have a price target of $50.00 on the company.
Raymond James downgraded Trina Solar (TSL) from a "Market Perform" rating to an "Underperform" rating.
Brean Murray initiated coverage on Energy Partners, Ltd. (EPL). They placed a "Buy" rating on the company.
Credit Agricole downgraded AK Steel Holding Co. (AKS) from an "Underperform" rating to a "Sell" rating.
CIBC downgraded Kirkland Lake Gold Inc. (KGI) from an "Outperform" rating to a "Sector Perform" rating.
Guggenheim downgraded Transocean (RIG) from a "Buy" rating to a "Neutral" rating. They have a price target of $50.00 on the company.
Raymond James downgraded Trina Solar (TSL) from a "Market Perform" rating to an "Underperform" rating.
Brean Murray initiated coverage on Energy Partners, Ltd. (EPL). They placed a "Buy" rating on the company.
Monday, July 23, 2012
AK Steel (AKS) (BRY) (CMRE) (COG) (CRZO) (DTE) (DVN) (KGC) (NXY) (NXY) (SLW) (SRE) (SYT) Downgraded by Analysts
Shares of commodity companies AK Steel Holding Co. (AKS), Berry Petroleum Comp (BRY), Comstock Resources (CMRE), Cabot Oil & Gas (COG), Carrizo Oil & Gas (CRZO), DTE Energy (DTE), Devon Energy Co. (DVN), Kinross Gold (KGC), Silver Wheaton Corp. (SLW), Sempra Energy (SRE) and Syngenta AG (SYT) were downgraded by analysts.
UBS AG (NYSE: UBS) downgraded AK Steel Holding Co. (AKS) from a "Buy" rating to a "Neutral" rating.
Tudor Pickering downgraded Berry Petroleum Comp (BRY) from an "Accumulate" rating to a "Hold" rating.
Wells Fargo & Co. (NYSE: WFC) downgraded Comstock Resources (CMRE) from an "Outperform" rating to a "Market Perform" rating.
Tudor Pickering downgraded Cabot Oil & Gas (COG) from an "Accumulate" rating to a "Hold" rating.
Tudor Pickering downgraded Carrizo Oil & Gas (CRZO) from a "Buy" rating to an "Accumulate" rating.
Argus downgraded DTE Energy (DTE) from a "Buy" rating to a "Hold" rating.
Tudor Pickering downgraded Devon Energy Co. (DVN) from a "Buy" rating to an "Accumulate" rating.
Macquarie downgraded Kinross Gold (KGC) from an "Outperform" rating to a "Neutral" rating.
Macquarie downgraded Silver Wheaton Corp. (SLW) from an "Outperform" rating to a "Neutral" rating.
Argus downgraded Sempra Energy (SRE) from a "Buy" rating to a "Hold" rating.
Sanford C. Bernstein downgraded Syngenta AG (SYT) from a "Market Perform" rating to an "Underperform" rating.
UBS AG (NYSE: UBS) downgraded AK Steel Holding Co. (AKS) from a "Buy" rating to a "Neutral" rating.
Tudor Pickering downgraded Berry Petroleum Comp (BRY) from an "Accumulate" rating to a "Hold" rating.
Wells Fargo & Co. (NYSE: WFC) downgraded Comstock Resources (CMRE) from an "Outperform" rating to a "Market Perform" rating.
Tudor Pickering downgraded Cabot Oil & Gas (COG) from an "Accumulate" rating to a "Hold" rating.
Tudor Pickering downgraded Carrizo Oil & Gas (CRZO) from a "Buy" rating to an "Accumulate" rating.
Argus downgraded DTE Energy (DTE) from a "Buy" rating to a "Hold" rating.
Tudor Pickering downgraded Devon Energy Co. (DVN) from a "Buy" rating to an "Accumulate" rating.
Macquarie downgraded Kinross Gold (KGC) from an "Outperform" rating to a "Neutral" rating.
Macquarie downgraded Silver Wheaton Corp. (SLW) from an "Outperform" rating to a "Neutral" rating.
Argus downgraded Sempra Energy (SRE) from a "Buy" rating to a "Hold" rating.
Sanford C. Bernstein downgraded Syngenta AG (SYT) from a "Market Perform" rating to an "Underperform" rating.
Tuesday, June 7, 2011
AK Steel (AKS) Fined by Osha for Safety Record Violations
AK Steel (NYSE:AKS) has been fined by the Occupational Safety and Health Administration (OSHA) for alleged record-keeping violations associated with hearing problems related to work at its western Pennsylvania-based Butler Works facility. The fine is for $206,000.
Osha inspectors claim AK Steel was in willful violation four times and was guilty 6 times of violations of a lesser nature.
From 2007 to 2010, AK Steel is charged with not properly documenting the results of hearing tests which supposedly revealed employees from the company suffered from losses related to work.
AK Steel has 15 days to comply with the conclusions, contest the ruling and fine, or request a conference with the government agency.
AK Steel closed Monday at $14.41, falling $0.58, or 3.87 percent.
Osha inspectors claim AK Steel was in willful violation four times and was guilty 6 times of violations of a lesser nature.
From 2007 to 2010, AK Steel is charged with not properly documenting the results of hearing tests which supposedly revealed employees from the company suffered from losses related to work.
AK Steel has 15 days to comply with the conclusions, contest the ruling and fine, or request a conference with the government agency.
AK Steel closed Monday at $14.41, falling $0.58, or 3.87 percent.
Tuesday, May 31, 2011
Steelmakers (X) (AKS) (NUE) (STLD) Enter Summer Positive
In America Memorial Day weekends heralds the unofficial start of summer, and steelmakers ended May on an up note, as shares of US Steel (NYSE:X), AK Steel (NYSE:AKS), Nucor (NYSE:NUE) and Steel Dynamics (NASDAQ:STLD) all closed up Friday.
Apparently investors has decided to take the chance the recent boost in prices by steelmakers is sustainable, as the industry responds to price declines in prices in the North American market.
For flat-rolled steel, prices slid form a high of $800 a ton to about $780 a ton since April. Some of this is the result of supply-chain shortage that seem to have been worked through now.
The drop in prices resulted in Nucor, AK Steel and Steverstal boosting prices by close to $40 a ton.
With demand remaining weak, it's questionable by analysts whether the increase in prices will be able to hold. Industry capacity utilization at this time is only about 75 percent, a very average number.
Results in the second quarter should continue to be strong for steelmakers, but heading into the third quarter higher prices of scrap metal, coking coal and iron ore, along with an anemic so-called economic recovery, has generated concerns as to the strength of the industry.
For the next five years analysts see growth for the steel industry only at about a 5 percent rate at highers, with many thinking it'll be lower than that.
US Steel closed Friday at $45.67, gaining $0.33, or 0.73 percent. AK Steel closed at $15.29, rising $0.25, or 1.66 percent. Nucor ended at $42.09, jumping $0.20, or 0.48 percent. Steel Dynamics closed at $17.02, climbing $0.23, or 1.37 percent.
Apparently investors has decided to take the chance the recent boost in prices by steelmakers is sustainable, as the industry responds to price declines in prices in the North American market.
For flat-rolled steel, prices slid form a high of $800 a ton to about $780 a ton since April. Some of this is the result of supply-chain shortage that seem to have been worked through now.
The drop in prices resulted in Nucor, AK Steel and Steverstal boosting prices by close to $40 a ton.
With demand remaining weak, it's questionable by analysts whether the increase in prices will be able to hold. Industry capacity utilization at this time is only about 75 percent, a very average number.
Results in the second quarter should continue to be strong for steelmakers, but heading into the third quarter higher prices of scrap metal, coking coal and iron ore, along with an anemic so-called economic recovery, has generated concerns as to the strength of the industry.
For the next five years analysts see growth for the steel industry only at about a 5 percent rate at highers, with many thinking it'll be lower than that.
US Steel closed Friday at $45.67, gaining $0.33, or 0.73 percent. AK Steel closed at $15.29, rising $0.25, or 1.66 percent. Nucor ended at $42.09, jumping $0.20, or 0.48 percent. Steel Dynamics closed at $17.02, climbing $0.23, or 1.37 percent.
Monday, May 23, 2011
AK Steel (AKS) Gets Upgrade from Morgan Stanley (MS)
Morgan Stanley (NYSE:MS) likes the outlook for the overall steel sector, and AK Steel Holding Co. (NYSE: AKS) specifically, as it raised its rating on the steel producer from an "Overweight" rating to an "Equal Weight" rating. They have a price target of $24 on the company.
"AK Steel is turning the corner, and earnings power is not priced in: While shares across the steel space have become cheap as a result of the recent correction, we see significant value upside in AKS shares, in particular (70% to our PT of $24). Our mid-cycle EBITDA estimate is 30% higher than what is discounted in the shares on our view that benefits from sustainable cost cuts, a lesser impact from iron ore costs, and improving margins in the company’s key electrical steel business have gone unnoticed," said Morgan Stanley.
Concerning EPS, they said, "We are raising our estimates by 30% in 2011 and 20-40% in 2012-13; we are now 15-40% above consensus in 2011-12 and 75% above in 2013. Our $24 price target is based on 10x 2012e EPS, and 5.0x our mid-cycle EBITDA estimate of $131/t."
It's hard to believe this scenario will be the one to play out, as it's far above consensus estimates, and is the best of the best case scenarios if it is to become a reality.
Most steel industry watchers see a slow five-year period for the sector and pressure on the steel industry for some time.
AK Steel Holding closed at $14.08, falling $0.05, or 0.35 percent.
"AK Steel is turning the corner, and earnings power is not priced in: While shares across the steel space have become cheap as a result of the recent correction, we see significant value upside in AKS shares, in particular (70% to our PT of $24). Our mid-cycle EBITDA estimate is 30% higher than what is discounted in the shares on our view that benefits from sustainable cost cuts, a lesser impact from iron ore costs, and improving margins in the company’s key electrical steel business have gone unnoticed," said Morgan Stanley.
Concerning EPS, they said, "We are raising our estimates by 30% in 2011 and 20-40% in 2012-13; we are now 15-40% above consensus in 2011-12 and 75% above in 2013. Our $24 price target is based on 10x 2012e EPS, and 5.0x our mid-cycle EBITDA estimate of $131/t."
It's hard to believe this scenario will be the one to play out, as it's far above consensus estimates, and is the best of the best case scenarios if it is to become a reality.
Most steel industry watchers see a slow five-year period for the sector and pressure on the steel industry for some time.
AK Steel Holding closed at $14.08, falling $0.05, or 0.35 percent.
Friday, November 5, 2010
Nucor (NYSE:NUE), AK Steel (NYSE:AKS), Commercial Metals (NYSE:CMC) Rise on Collapsing US Dollar, Fed Inflation
Nucor (NYSE:NUE), AK Steel Holding (NYSE:AKS), Commercial Metals Company (NYSE:CMC) all moved up with the broader commodity sector Thursday, as the announcement that 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.
Commodity prices going up included gold, silver, oil prices and aluminum. Gold prices reached record levels again, straining toward the $1,400 an ounce level. Silver surged past the $26 level, and seems poised to continue moving up.
The steel industry could go through a period of fluctuation as currencies respond to the fall in value of the U.S. dollar, which will affect margins because of the wide swings in currency value and the battle by some against the Chinese renminbi, which they'll have to take defensive measures against.
Because of market factors, and the overall health of the steel industry, it probably won't participate in the surge in commodity prices and demand as other raw materials will do.
Nucor closed at $39.40 Thursday, rising $0.86, or 2.23 percent. AK Steel Holding surged to close at $13.55, gaining $0.29, or 2.19 percent. Commercial Metals Company was up to $14.59 at the end of the trading session, gaining $0.54, or 3.84 percent.
Commodity prices going up included gold, silver, oil prices and aluminum. Gold prices reached record levels again, straining toward the $1,400 an ounce level. Silver surged past the $26 level, and seems poised to continue moving up.
The steel industry could go through a period of fluctuation as currencies respond to the fall in value of the U.S. dollar, which will affect margins because of the wide swings in currency value and the battle by some against the Chinese renminbi, which they'll have to take defensive measures against.
Because of market factors, and the overall health of the steel industry, it probably won't participate in the surge in commodity prices and demand as other raw materials will do.
Nucor closed at $39.40 Thursday, rising $0.86, or 2.23 percent. AK Steel Holding surged to close at $13.55, gaining $0.29, or 2.19 percent. Commercial Metals Company was up to $14.59 at the end of the trading session, gaining $0.54, or 3.84 percent.
Thursday, October 28, 2010
AK Steel (NYSE:AKS) Worst Pick Says UBS (NYSE:UBS)
UBS (NYSE:UBS) sees Thyssen's new mill as an overall drag on AK Steel (NYSE:AKS), which will hurt their more profitable businesses. Consequently, UBS said they're maintaining a "Neutral" rating on the company.
"We cut our Q4e EPS to a $0.64 loss to incorporate guidance of an $80/t EBIT loss on 10% fewer tons, and no planned repeat of a Q3 $8M+ FX gain. Seasonally weak Q4 volumes distort profits somewhat, but we see still challenging conditions into 2011. As such, we cut our 2011e to $0.30 from $0.42 and vs consensus $1.08," said UBS.
"AK is our least favorite pick...We have longer-term structural concerns over
pressure from Thyssen’s new mill, from both its high quality focus in AK’s auto niche business and just-started stainless steel capacity that can hurt AK's higher-profit businesses."
AK closed Wednesday at $12.40, losing $0.44, or 3.43 percent. UBS has a price target of $13 on them, lowering them from $14.
"We cut our Q4e EPS to a $0.64 loss to incorporate guidance of an $80/t EBIT loss on 10% fewer tons, and no planned repeat of a Q3 $8M+ FX gain. Seasonally weak Q4 volumes distort profits somewhat, but we see still challenging conditions into 2011. As such, we cut our 2011e to $0.30 from $0.42 and vs consensus $1.08," said UBS.
"AK is our least favorite pick...We have longer-term structural concerns over
pressure from Thyssen’s new mill, from both its high quality focus in AK’s auto niche business and just-started stainless steel capacity that can hurt AK's higher-profit businesses."
AK closed Wednesday at $12.40, losing $0.44, or 3.43 percent. UBS has a price target of $13 on them, lowering them from $14.
Wednesday, October 27, 2010
US Steel (NYSE:X), AK Steel (NYSE:AKS), ArcelorMittal (NYSE: MT) Post Disappointing Earnings
The steel industry remains under tremendous pressure, as US Steel (NYSE:X), AK Steel (NYSE:AKS), ArcelorMittal (NYSE: MT) all reported poor results for their most recent quarter, with US Steel and AK Steel both posting losses.
Weak economies around the world are the major contributors to the terrible performance of the steel industry, as even countries with growth prospects like China are cutting back in areas to protect their economies from further erosion, especially the construction sector in China.
The consequence of China cutting back on domestic steel consumption is companies there will attempt to make up for it by exporting steel to other nations, which will continue to put downward pressure on prices, margins and earnings.
Every important metric for the industry is under pressure, as demand has fallen, sales dropped and costs risen. Many steel companies don't see this changing anytime soon.
As the global economy goes so will go the steel industry, and that doesn't bode well in an economic climate of caution and little or no growth.
US Steel lost $0.35 a share on revenue of $4.50 billion. Last year in the same quarter US Steel lost $0.17 a share. They haven't been profitable since the latter part of 2008.
ArcelorMittal's earnings dropped by 21 percent in the second quarter, but were still able to increase profits by 48 percent over the same time last year. Most of that is attributed to China demand for steel falling.
AK Steel also posted a loss for the quarter, losing $59.2 million, based mostly on the increase in iron ore prices.
Weak economies around the world are the major contributors to the terrible performance of the steel industry, as even countries with growth prospects like China are cutting back in areas to protect their economies from further erosion, especially the construction sector in China.
The consequence of China cutting back on domestic steel consumption is companies there will attempt to make up for it by exporting steel to other nations, which will continue to put downward pressure on prices, margins and earnings.
Every important metric for the industry is under pressure, as demand has fallen, sales dropped and costs risen. Many steel companies don't see this changing anytime soon.
As the global economy goes so will go the steel industry, and that doesn't bode well in an economic climate of caution and little or no growth.
US Steel lost $0.35 a share on revenue of $4.50 billion. Last year in the same quarter US Steel lost $0.17 a share. They haven't been profitable since the latter part of 2008.
ArcelorMittal's earnings dropped by 21 percent in the second quarter, but were still able to increase profits by 48 percent over the same time last year. Most of that is attributed to China demand for steel falling.
AK Steel also posted a loss for the quarter, losing $59.2 million, based mostly on the increase in iron ore prices.
Wednesday, October 13, 2010
POSCO (NYSE:PKX), US Steel (NYSE:X), Nucor (NYSE:NUE), Reliance (NYSE:RS) on UBS' (NYSE:UBS) Outlook for Industry
Citing soft flat-rolled volumes, UBS (NYSE:UBS) said Commercial Metals Company (NYSE:CMC) and United States Steel Corp. (NYSE:X) could miss earnings, pushing the entire sector down Tuesday.
Even more dramatic was the downwardly revised full-year profit estimate of POSCO (NYSE:PKX), which was slashed by 7 percent. Slowing demand and higher costs were the reasons given for the changes.
The one positive note was Schnitzer Steel Industries Inc. (NASDAQ:SCHN), which UBS said could generate better results in the third quarter than thought.
The Market Vectors Steel ETF (NYSE:SLX) closed at $64.88, losing $0.67, or 1.02 percent.
Reliance Steel & Aluminum closed Tuesday at $43.24, down $0.33, or 0.76 percent. Nucor Corp. (NYSE:NUE) finished the session at $39.88, losing $0.20, or 0.50 percent. AK Steel Holding Corp. (NYSE:AKS) dropped to $14.50, a loss of $0.14, or 0.96 percent.
Posco plummeted to $114.47, falling $5.03, or 4.21 percent. Schnitzer Steel Industries Inc. fell to an even $50, a slight loss of $0.03, or 0.06 percent. Commercial Metals Company was also off just a little, ending at $14.76, dropping $0.06, or 0.40 percent.
The steel industry overall is in for a rough ride as news continues to confirm demand is slowing.
Even more dramatic was the downwardly revised full-year profit estimate of POSCO (NYSE:PKX), which was slashed by 7 percent. Slowing demand and higher costs were the reasons given for the changes.
The one positive note was Schnitzer Steel Industries Inc. (NASDAQ:SCHN), which UBS said could generate better results in the third quarter than thought.
The Market Vectors Steel ETF (NYSE:SLX) closed at $64.88, losing $0.67, or 1.02 percent.
Reliance Steel & Aluminum closed Tuesday at $43.24, down $0.33, or 0.76 percent. Nucor Corp. (NYSE:NUE) finished the session at $39.88, losing $0.20, or 0.50 percent. AK Steel Holding Corp. (NYSE:AKS) dropped to $14.50, a loss of $0.14, or 0.96 percent.
Posco plummeted to $114.47, falling $5.03, or 4.21 percent. Schnitzer Steel Industries Inc. fell to an even $50, a slight loss of $0.03, or 0.06 percent. Commercial Metals Company was also off just a little, ending at $14.76, dropping $0.06, or 0.40 percent.
The steel industry overall is in for a rough ride as news continues to confirm demand is slowing.
Friday, September 17, 2010
Goldman (NYSE:GS) Lowers Price Target, EPS for AK Steel (NYSE:AKS)
AK Steel Holding (NYSE:AKS) has the price target and earnings per share of the company lowered by Goldman Sachs (NYSE:GS), although Goldman did maintain their "Buy" rating on the stock of the steel company.
Earnings per share estimates for the third quarter were dropped to $0.13 from $0.20, and for the fourth quarter from $0.18 to $0.25.
Lower volume and expected higher costs were the reasoning behind the changes.
AK Steel recently lowered its own guidance going forward.
Earnings per share estimates for the third quarter were dropped to $0.13 from $0.20, and for the fourth quarter from $0.18 to $0.25.
Lower volume and expected higher costs were the reasoning behind the changes.
AK Steel recently lowered its own guidance going forward.
Wednesday, September 15, 2010
AK Steel (NYSE:AKS) Plunges on Weaker Guidance
The overall steel industry is taking a big hit as companies downwardly revise their guidance in the wake of a weakening US economy. AK Steel (NYSE:AKS) joined the growing number of steel companies lowering guidance for the third quarter, and the stock price plummeted in response.
AK now expects a loss in the third quarter of $20 a ton, significantly down from the projected profits of close to $15 a ton.
Higher operating and raw material costs were cited as the reason for the lower guidance.
The steel company dropped to $13.60, falling $0.93, or 6.37 percent, as of 1:52 PM EDT.
AK now expects a loss in the third quarter of $20 a ton, significantly down from the projected profits of close to $15 a ton.
Higher operating and raw material costs were cited as the reason for the lower guidance.
The steel company dropped to $13.60, falling $0.93, or 6.37 percent, as of 1:52 PM EDT.
Wednesday, September 8, 2010
US Steel (NYSE:X), AK Steel, (NYSE:AKS), Cliffs (NYSE:CLF) Nucor (NYSE:NUE) Rise on Pricing, Infrastructure
US Steel (NYSE:X), AK Steel Holding Corporation (NYSE:AKS), Cliffs Natural Resources Inc (NYSE:CLF) and Nucor (NYSE:NUE) are all up today on news from Arcelor Mittal (NYSE:MT) they're going to raise prices, and the possibility of getting more business from an infrastructure initiative from the White House.
Another factor was the announced shuttering of steel plants in China for a couple of weeks in order to deal with the glut of steel in the market at this time. That could give more pricing power to the steel companies.
Finally, the PMI report from China showed they were growing at a better rate than thought, and that suggests better commodity demand, including steel.
China has hinted of moving their infrastructure projects to rural areas instead of urban areas, as the property markets in urban areas are in danger of a bubble.
The one element that has proven legs in all of this is pricing power, which most steel companies will probably engage in in response to Arcelor Mittal. The rest is highly speculative and unproven, although a possibility.
Another factor was the announced shuttering of steel plants in China for a couple of weeks in order to deal with the glut of steel in the market at this time. That could give more pricing power to the steel companies.
Finally, the PMI report from China showed they were growing at a better rate than thought, and that suggests better commodity demand, including steel.
China has hinted of moving their infrastructure projects to rural areas instead of urban areas, as the property markets in urban areas are in danger of a bubble.
The one element that has proven legs in all of this is pricing power, which most steel companies will probably engage in in response to Arcelor Mittal. The rest is highly speculative and unproven, although a possibility.
Monday, August 30, 2010
U.S. Steel (NYSE:X), AK Steel (NYSE:AKS), Nucor, (NYSE:NUE) - All Under Pressure
The steel industry is under pressure as a surplus of steel and slowing Chinese demand puts pressure on companies like U.S. Steel (NYSE:X), AK Steel (NYSE:AKS) and Nucor (NYSE:NUE).
Credit Suisse (NYSE:CS) recently said that U.S. Steel and AK Steel are particularly vulnerable to a fall in prices.
On the China part of the issue, much depends on how they continue to go forward with the cooling off of the real estate market in urban areas. At this time about growth is about 3 percent lower than before, and that definitely cuts into steel demand.
Another bit of news that has yet to be confirmed on China is they may now direct stimulus efforts to the rural areas of the country which could make up for a lot of the slowdown in urban areas. If that's the case, it could change the dynamics, although it would take time to ramp up.
On the other hand, if steel production in China start to increase again, that could offer support, although it wouldn't be anything that would push prices up dramatically, even in the best case scenario.
Even with the expected increase of steel prices in September of up to $30 a ton (probably), in the fourth quarter expectations are scrap prices will come under pressure and drop. That is based on the belief scrap steel supply will increase during that period.
The recent increase in scrap prices should also push more steel into scrap yards, which will of course bring more supply than needed, driving steel prices back down.
This could create a domino effect in other steel products and cut into margins and earnings.
Ak Steel has been cutting capacity in a low steel demand market, and U.S. Steel has a high debt load which cuts back on their flexibility and has made it extremely difficult to be profitable, as the last six quarters have shown.
On the other hand Nucor and Steel Dynamics (Nasdaq:STLD) have been able to turn a profit in slow times, and are positioned strongly to be able to at least be profitable whatever way the market turns, which should be down in the short term.
Credit Suisse (NYSE:CS) recently said that U.S. Steel and AK Steel are particularly vulnerable to a fall in prices.
On the China part of the issue, much depends on how they continue to go forward with the cooling off of the real estate market in urban areas. At this time about growth is about 3 percent lower than before, and that definitely cuts into steel demand.
Another bit of news that has yet to be confirmed on China is they may now direct stimulus efforts to the rural areas of the country which could make up for a lot of the slowdown in urban areas. If that's the case, it could change the dynamics, although it would take time to ramp up.
On the other hand, if steel production in China start to increase again, that could offer support, although it wouldn't be anything that would push prices up dramatically, even in the best case scenario.
Even with the expected increase of steel prices in September of up to $30 a ton (probably), in the fourth quarter expectations are scrap prices will come under pressure and drop. That is based on the belief scrap steel supply will increase during that period.
The recent increase in scrap prices should also push more steel into scrap yards, which will of course bring more supply than needed, driving steel prices back down.
This could create a domino effect in other steel products and cut into margins and earnings.
Ak Steel has been cutting capacity in a low steel demand market, and U.S. Steel has a high debt load which cuts back on their flexibility and has made it extremely difficult to be profitable, as the last six quarters have shown.
On the other hand Nucor and Steel Dynamics (Nasdaq:STLD) have been able to turn a profit in slow times, and are positioned strongly to be able to at least be profitable whatever way the market turns, which should be down in the short term.
Tuesday, August 3, 2010
AK Steel (NYSE:AKS) Upping Prices on Carbon Steel Products
AK Steel (NYSE:AKS) said Monday they're going to increase the price of their carbon steel products by $40 a ton going forward.
Demand for carbon steel products is the impetus behind the price increase, along with increasing margins because of higher costs.
The new prices will start immediately, and will be added to any new orders for carbon steel products, said the steelmaker.
This refers to up to date spot market base prices, which the $40 a ton will be added to.
Demand for carbon steel products is the impetus behind the price increase, along with increasing margins because of higher costs.
The new prices will start immediately, and will be added to any new orders for carbon steel products, said the steelmaker.
This refers to up to date spot market base prices, which the $40 a ton will be added to.
Tuesday, July 27, 2010
AK Steel (NYSE:AKS) Exceeds Estimates, but Poor Guidance
Although AK Steel (NYSE:AKS) was able to turn things around some and turn a profit in the latest quarter, exceeding analysts' expectations, their guidance wasn't inspiring, causing investors to push the price of the stock down early in the trading day, and it remains down by well over 3 percent.
Earnings for the quarter were $26.7 million, or 24 cents a share, over three times the 7 cents a share analysts expected. Last year during the same quarter AK Steel lost $47 million, or 43 cents a share.
Revenue for the quarter, similar to US Steel (NYSE:X), surged by over double what it was last year, $793.6 million, to $1.6 billion.
Like their peers, there isn't much pricing power in the steel industry at this time, and the company expects prices to fall 5 percent in the quarter. That brings projections for price per ton down from $17 that was looked for to $15.
US steel also reported challenges for the next quarter on managing operational costs.
Iron ore costs are priced in to increase by about 65 percent next quarter for AK Steel and the rest of the steel industry.
Earnings for the quarter were $26.7 million, or 24 cents a share, over three times the 7 cents a share analysts expected. Last year during the same quarter AK Steel lost $47 million, or 43 cents a share.
Revenue for the quarter, similar to US Steel (NYSE:X), surged by over double what it was last year, $793.6 million, to $1.6 billion.
Like their peers, there isn't much pricing power in the steel industry at this time, and the company expects prices to fall 5 percent in the quarter. That brings projections for price per ton down from $17 that was looked for to $15.
US steel also reported challenges for the next quarter on managing operational costs.
Iron ore costs are priced in to increase by about 65 percent next quarter for AK Steel and the rest of the steel industry.
Thursday, July 15, 2010
Goldman (NYSE:GS) Upgrades AK Steel (NYSE:AKS), Stock Surges
After Goldman Sachs (NYSE:GS) analyst Sal Tharani upgraded AK Steel (NYSE:AKS) from "Neutral" to "Buy," the stock soared.
The reasoning behind the upgrade was the continuing drop in the price of iron ore, which in the mid-term should help the company's share price.
The difference between AK Steel and its competitors is AK buys iron ore, while others who own their own mining projects suffer from the lower prices, giving AK an upper hand while that situation lasts.
In the short term, this may not be that important, but over time it will definitely be a plus for AK, according to Tharani. He added that the very profitable specialty steel segment isn't reflected in AK's share price, another reason for the upgrade.
Spot iron ore prices in China have plunged 35 percent since April 2010.
The reasoning behind the upgrade was the continuing drop in the price of iron ore, which in the mid-term should help the company's share price.
The difference between AK Steel and its competitors is AK buys iron ore, while others who own their own mining projects suffer from the lower prices, giving AK an upper hand while that situation lasts.
In the short term, this may not be that important, but over time it will definitely be a plus for AK, according to Tharani. He added that the very profitable specialty steel segment isn't reflected in AK's share price, another reason for the upgrade.
Spot iron ore prices in China have plunged 35 percent since April 2010.
Wednesday, July 7, 2010
AK Steel (NYSE:AKS) Soaring as Takeover Rumors Increase
Rumors continue to spread on the possible takeover of AK Steel (NYSE:AKS) by ThyssenKrupp.
Some have attempted to rebut the claims, but that hasn't dampened the enthusiasm of traders taking advantage of the unproven claims at this time.
What the rumor entails is ThyssenKrupp being interested in taking a 40 percent stake in AK Steel, which was sourced by a dealer, with no confirmation it is true.
As of 12:32 PM EDT the share price of AK Steel stood at $12.43, a gain of $0.91, or 7.90 percent.
Some have attempted to rebut the claims, but that hasn't dampened the enthusiasm of traders taking advantage of the unproven claims at this time.
What the rumor entails is ThyssenKrupp being interested in taking a 40 percent stake in AK Steel, which was sourced by a dealer, with no confirmation it is true.
As of 12:32 PM EDT the share price of AK Steel stood at $12.43, a gain of $0.91, or 7.90 percent.
Saturday, June 5, 2010
US Steel (NYSE:X), AK Steel (NYSE:AKS), Nucor (NYSE:NUE), Arcelor Mittal (NYSE:MT) Crushed Last Week
Steel stocks took a beating all week, as US Steel (NYSE:X), AK Steel (NYSE:AKS), Nucor (NYSE:NUE) and Arcelor Mittal (NYSE:MT) stock charts all looked like you were going down a mountain. One exception was Gerdau S.A. (NYSE:GGB), which while losing share price during the week, wasn't as pronounced as the others.
All of this is based on the economic sovereign debt crisis in Europe, as well as the belt tightening of China, which will result in lowered demand for steel, and is also lowering the price of iron ore.
US Steel is particularly exposed to Europe, which could cause them problems in the long run, as that's a challenge that isn't going to go away any time soon.
US Steel finished the week at $41.99, down Friday by $3.29, or 7.27 percent.
The week for AK Steel ended at $13.34 a share, down on Friday by $1.14, or 7.87 percent.
Nucor ended the last five trading days at $40.93, dropping on Friday by $1.61, or 3.78 percent.
For Arcelor Mittal, they came in at $27.50 for the end of the week, plunging on Friday by $1.63, or 5.60 percent.
Gerdau S.A. finished the trading week at $13.01, down $0.64 on the day, or 4.69 percent.
With this precipitous weekly drop in steel stocks, there is sure to be a rebound based on that and nothing else, the reason why some say they like the stocks now.
That's primarily based on current valuations and not related to fundamentals and the macro-economic realities they're facing.
Long-term the steel industry and companies heavily exposed to it should struggle, especially those with heavy exposure to Europe, which is guaranteed to be a slow economy for some time to come, if not poised to go back into a recession, if they're not already there.
China's different only in the clarity isn't there yet as to how the austerity measures they're taking will impact the steel and other industries.
While China will no doubt continue to grow, it won't be at the 12 percent or higher rates it has been in the recent past. More than likely it'll start to come down to a more reasonable 7 to 8 percent rate in the near term.
With the U.S. economy about level at this time, and the combination of Europe and China, it'll have a dramatic impact on the commodity sector in general, and steel industry specifically.
All of this is based on the economic sovereign debt crisis in Europe, as well as the belt tightening of China, which will result in lowered demand for steel, and is also lowering the price of iron ore.
US Steel is particularly exposed to Europe, which could cause them problems in the long run, as that's a challenge that isn't going to go away any time soon.
US Steel finished the week at $41.99, down Friday by $3.29, or 7.27 percent.
The week for AK Steel ended at $13.34 a share, down on Friday by $1.14, or 7.87 percent.
Nucor ended the last five trading days at $40.93, dropping on Friday by $1.61, or 3.78 percent.
For Arcelor Mittal, they came in at $27.50 for the end of the week, plunging on Friday by $1.63, or 5.60 percent.
Gerdau S.A. finished the trading week at $13.01, down $0.64 on the day, or 4.69 percent.
With this precipitous weekly drop in steel stocks, there is sure to be a rebound based on that and nothing else, the reason why some say they like the stocks now.
That's primarily based on current valuations and not related to fundamentals and the macro-economic realities they're facing.
Long-term the steel industry and companies heavily exposed to it should struggle, especially those with heavy exposure to Europe, which is guaranteed to be a slow economy for some time to come, if not poised to go back into a recession, if they're not already there.
China's different only in the clarity isn't there yet as to how the austerity measures they're taking will impact the steel and other industries.
While China will no doubt continue to grow, it won't be at the 12 percent or higher rates it has been in the recent past. More than likely it'll start to come down to a more reasonable 7 to 8 percent rate in the near term.
With the U.S. economy about level at this time, and the combination of Europe and China, it'll have a dramatic impact on the commodity sector in general, and steel industry specifically.
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