Citigroup (NYSE:C) kept its "Buy" rating on Cliffs Natural Resources (NYSE:CLF), with a price target of $87 a share.
Even though they missed their earnings numbers in the last quarter, Cliffs
still generated earnings five times what they were last year in the second quarter, garnering $260.7 million, or $1.92 a share. Analysts were looking for $2.02 a share.
Still, iron ore prices are the key for the performance of Cliffs, and even if the economy slows down, steel should still be in demand a decent levels, which bodes well for the company.
Uncertainty about China, Europe and the United States makes this a difficult call, but Citigroup evidently believes Cliffs will perform well in the near term, and has called it that way.
Showing posts with label Steel. Show all posts
Showing posts with label Steel. Show all posts
Friday, July 30, 2010
Wednesday, July 21, 2010
Vale (NYSE:VALE) Up as Morgan Stanley (NYSE:MS) Says China Easing Tightening
Morgan Stanley (NYSE:MS) says China appears to be easing tightening measures to manage growth, and Vale SA (NYSE:VALE) responded Tuesday by rising over 6 percent in New York on the news.
Vale is the leading producer of iron ore in the world, and would benefit strongly if the assertion by Morgan Stanley proves to be true. It would of course help their competitors like BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RTP), along with those in the steel industry as well.
The problem seems to be there is no proof of the assertion, only speculation.
It would be a major change in policy, which seems to have barely started to be implemented, making it a stretch as to it being true. This hasn't stopped analysts and others from jumping on the bandwagon and acting as if this is already a story that has happened.
Vale is reportedly running its iron ore plants at full capacity in anticipation of the possibility, and the company director, Claudio Alves claims China is starting to replenish their steel stockpiles.
This may or may not mean they are changing policy, as rebuilding stockpiles could be from prior use which isn't scheduled for huge building projects going forward.
If this is found to be true, just about every precious metal and companies producing them would shoot up in price. For now, we should wait to see if this is really the case, as many assertions have been made but no proof offered.
Vale is the leading producer of iron ore in the world, and would benefit strongly if the assertion by Morgan Stanley proves to be true. It would of course help their competitors like BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RTP), along with those in the steel industry as well.
The problem seems to be there is no proof of the assertion, only speculation.
It would be a major change in policy, which seems to have barely started to be implemented, making it a stretch as to it being true. This hasn't stopped analysts and others from jumping on the bandwagon and acting as if this is already a story that has happened.
Vale is reportedly running its iron ore plants at full capacity in anticipation of the possibility, and the company director, Claudio Alves claims China is starting to replenish their steel stockpiles.
This may or may not mean they are changing policy, as rebuilding stockpiles could be from prior use which isn't scheduled for huge building projects going forward.
If this is found to be true, just about every precious metal and companies producing them would shoot up in price. For now, we should wait to see if this is really the case, as many assertions have been made but no proof offered.
Wednesday, July 7, 2010
Walter Energy (NYSE:WLT) Upgraded by FBR Capital Markets (Nasdaq:FBCM)
At one point in the trading day Tuesday, Walter Energy Inc. (NYSE:WLT) climbed 5.9 percent, peaking around 10:30 AM EDT, as FBR Capital Markets (Nasdaq:FBCM) upgraded the company from "Market Perform" to "Outperform."
Walter Energy had been moving nice on the year until about April 15, when they reached their 52-week high of $99.45 a share. It's been downhill since then, with the company plunging in value since then.
At the end of the trading session Tuesday, Walter finished at $61.27, down slightly by $0.19, or 0.31 percent.
Walter produces coal for the steel industry.
Walter Energy had been moving nice on the year until about April 15, when they reached their 52-week high of $99.45 a share. It's been downhill since then, with the company plunging in value since then.
At the end of the trading session Tuesday, Walter finished at $61.27, down slightly by $0.19, or 0.31 percent.
Walter produces coal for the steel industry.
Friday, May 7, 2010
Nucor (NYSE:NUE) Acquiring Companies, Own Shares
Nucor (NYSE:NUE) seems to be getting on surer footing in a tough steel market, as residential and non-residential construction markets continue to be tough.
Expansion through acquisition and acquiring shares in their own company has been much of the focus recently, as they prepare for what they hope is an upswing in the steel market.
Nucor has increased production at their steel mills from last year, and is looking for an even better quarter than the the first quarter.
Along with competitor Gerdau Ameristeel (NYSE:GNA) (TSE:GNA), they've also commited to keeping prices for wide-flange steel beams where they're at now, as they want to continue the industry on a more even keel, after several years of extreme challenges.
Expansion through acquisition and acquiring shares in their own company has been much of the focus recently, as they prepare for what they hope is an upswing in the steel market.
Nucor has increased production at their steel mills from last year, and is looking for an even better quarter than the the first quarter.
Along with competitor Gerdau Ameristeel (NYSE:GNA) (TSE:GNA), they've also commited to keeping prices for wide-flange steel beams where they're at now, as they want to continue the industry on a more even keel, after several years of extreme challenges.
Friday, April 23, 2010
Nucor (NYSE:NUE) CEO Concerned with Steel Overcapacity
The CEO of Nucor (NYSE:NUE), Dan DiMicco, said recently he has concerns over Severstal, US Steel (NYSE:X) and ArcelorMittal (AMS:MT) (NYSE:MT), as they restart blast furnances in the US which will add approximately 8 million short tons of capacity to the market.
DiMicco stated, “We have serious concerns that capacity being brought back will get ahead of the demand in the marketplace because the economy isn’t really growing, we are not creating jobs. We are not seeing a lot of commercial construction, nonresidential construction, so it’s a concern. And it should be a concern for everybody. And anybody that says it’s not an issue is kidding themselves or trying to kid you.”
The result of all this, if it happens, will be the drop in steel prices which would put pressure on earnings of steel companies.
DiMicco stated, “We have serious concerns that capacity being brought back will get ahead of the demand in the marketplace because the economy isn’t really growing, we are not creating jobs. We are not seeing a lot of commercial construction, nonresidential construction, so it’s a concern. And it should be a concern for everybody. And anybody that says it’s not an issue is kidding themselves or trying to kid you.”
The result of all this, if it happens, will be the drop in steel prices which would put pressure on earnings of steel companies.
Saturday, April 10, 2010
Coal Prices Up On Massey (NYSE:MEE) Mine Explosion
Coal prices soar after Massey mine explosion
The explosion at a Massey Energy (NYSE:MEE) mine has caused the price of metallurgical coal to increase as a tight coal market will continue to struggle with the loss of coal supply.
Now that the final four miners' bodies have been found, bringing the total loss of life to 29, it becomes the worst mining accident since 1970.
It'll take months to find the cause behind the explosions, and that will drag on the coal market for some time.
Metallurgical coal is a higher quality product, and demand is high for it, especially in Asia.
Estimates for the Upper Big Branch mine was to ship about 1.6 million tons of metallurgical coal in 2010, about 3 percent of all production in the U.S., based on numbers from 2009.
Even with increased production at other mines, Massey said it's doubtful they're be able to replace what the Upper Big Branch mine would have produced.
With spot prices already increasing by 22 percent, steelmakers will be under pressure, determined by whether or not they'll have to eat the higher prices and have their margins fall, or they are able to pass them on to their customers.
The explosion at a Massey Energy (NYSE:MEE) mine has caused the price of metallurgical coal to increase as a tight coal market will continue to struggle with the loss of coal supply.
Now that the final four miners' bodies have been found, bringing the total loss of life to 29, it becomes the worst mining accident since 1970.
It'll take months to find the cause behind the explosions, and that will drag on the coal market for some time.
Metallurgical coal is a higher quality product, and demand is high for it, especially in Asia.
Estimates for the Upper Big Branch mine was to ship about 1.6 million tons of metallurgical coal in 2010, about 3 percent of all production in the U.S., based on numbers from 2009.
Even with increased production at other mines, Massey said it's doubtful they're be able to replace what the Upper Big Branch mine would have produced.
With spot prices already increasing by 22 percent, steelmakers will be under pressure, determined by whether or not they'll have to eat the higher prices and have their margins fall, or they are able to pass them on to their customers.
Thursday, April 1, 2010
Citigroup (NYSE:C) Survey Says Commodities Bearish
Commodity Bears
A survey by Citigroup (NYSE:C) of professional investors found investing in commodities is be turning bearish and growing.
Most of this is based on stocks related to basic materials, which are considered high priced at this time, with little in the way of significant profits being generated with them.
Along with the obvious building materials industries, other sectors include steel, minerals, diversified chemicals and metals.
Oil is also expected to remain level based on little increase in demand, although there is a lot of contrary thought on that, as many feel it'll rise into $90 a barrel in 2010.
In general, this survey talks more of companies reliant on commodities than they do on pure commodity plays. We also have to consider individual commodities as well, where some are poised to surge like iron ore and gold, while others need to be approached with a long term outlook.
A survey by Citigroup (NYSE:C) of professional investors found investing in commodities is be turning bearish and growing.
Most of this is based on stocks related to basic materials, which are considered high priced at this time, with little in the way of significant profits being generated with them.
Along with the obvious building materials industries, other sectors include steel, minerals, diversified chemicals and metals.
Oil is also expected to remain level based on little increase in demand, although there is a lot of contrary thought on that, as many feel it'll rise into $90 a barrel in 2010.
In general, this survey talks more of companies reliant on commodities than they do on pure commodity plays. We also have to consider individual commodities as well, where some are poised to surge like iron ore and gold, while others need to be approached with a long term outlook.
Tuesday, March 30, 2010
Teck Resources (TSE:TCK.B) Surges on Steel Demand
Teck Resources looks good on steel demand
Demand for steel continues to explode from China and emerging markets, driving up the prices of iron ore and coking coal, while companies like Teck Resources (TSE:TCK.B), which provide the raw materials needed for steel production, go up with the prices.
Add to that an estimated increase in production in steel industries residing in G7 countries, and you have a huge market about to explode for some time to come.
Iron ore and coking coal are key ingredients in the production of steel, the reason they're moving up in price along with the demand for steel.
Consequently, companies like Tech Resources are able to command top prices for their raw materials as countries and companies battle to be sure they get what they need for production.
Tech Resources will increase contract prices for its top-grade coking coal from $128 a ton to $200 a ton for the quarter beginning in April and ending in June. When you consider they make a nice profit at the $128 level, you can see how good it should be going forward, barring any unforeseen geopolitical problems or slowing down in the economies of the countries generating the demand.
Demand for steel continues to explode from China and emerging markets, driving up the prices of iron ore and coking coal, while companies like Teck Resources (TSE:TCK.B), which provide the raw materials needed for steel production, go up with the prices.
Add to that an estimated increase in production in steel industries residing in G7 countries, and you have a huge market about to explode for some time to come.
Iron ore and coking coal are key ingredients in the production of steel, the reason they're moving up in price along with the demand for steel.
Consequently, companies like Tech Resources are able to command top prices for their raw materials as countries and companies battle to be sure they get what they need for production.
Tech Resources will increase contract prices for its top-grade coking coal from $128 a ton to $200 a ton for the quarter beginning in April and ending in June. When you consider they make a nice profit at the $128 level, you can see how good it should be going forward, barring any unforeseen geopolitical problems or slowing down in the economies of the countries generating the demand.
Monday, March 29, 2010
Teck Resources (NYSE:TCK) Increasing Coal Production by 50 Percent in 5 Years
Teck Resources Coal Production
Teck Resources (NYSE:TCK) has stated it wants to increase its coal production by 50 percent within five years as demand for coking coal skyrockets.
This is probably a realistic goal if it's predicated upon China's hunger for coking coal, as they can't get enough of it to feed their needs, even after they increased coal imports by 500 percent last year.
In 2010 expectations are China will import over 30 million tons of coal this year, as their domestic supply can't keep up with their demand from steel mills.
Steel production is projected to continue to increase in China for some time, and that will guarantee demand for coking coal will increase with it.
Teck Resources will increase revenue and profits with it if they can meet their coal production goals.
Teck Resources (NYSE:TCK) has stated it wants to increase its coal production by 50 percent within five years as demand for coking coal skyrockets.
This is probably a realistic goal if it's predicated upon China's hunger for coking coal, as they can't get enough of it to feed their needs, even after they increased coal imports by 500 percent last year.
In 2010 expectations are China will import over 30 million tons of coal this year, as their domestic supply can't keep up with their demand from steel mills.
Steel production is projected to continue to increase in China for some time, and that will guarantee demand for coking coal will increase with it.
Teck Resources will increase revenue and profits with it if they can meet their coal production goals.
Tuesday, March 16, 2010
JPMorgan (NYSE:JPM): Iron Ore Up 65 Percent
Iron Ore Prices
JPMorgan Chase said recently that iron ore prices could increase by as high as 65 percent this year as Chinese demand from many of the private, smaller steel mills is stronger than anticipated.
This has caused some consternation on the part of Chinese government officials who had been negotiating with the three major iron ore providers over prices, when the smaller steel mills made deals with the companies which made it more difficult for China to maintain its hold on the prices it wanted.
The three major providers of iron ore are Vale SA (NYSE:VALE), Rio Tinto Group (LSE:RIO)and BHP Billiton Ltd. (NYSE:BHP), all of which should benefit strongly from the inevitable higher prices.
China steel production has been far higher than expected, and supposedly in recovery mode while the rest of the world is largely still in a recession, contrary to the assertions we're in a recovery.
Iron Ore Prices
JPMorgan Chase said recently that iron ore prices could increase by as high as 65 percent this year as Chinese demand from many of the private, smaller steel mills is stronger than anticipated.
This has caused some consternation on the part of Chinese government officials who had been negotiating with the three major iron ore providers over prices, when the smaller steel mills made deals with the companies which made it more difficult for China to maintain its hold on the prices it wanted.
The three major providers of iron ore are Vale SA (NYSE:VALE), Rio Tinto Group (LSE:RIO)and BHP Billiton Ltd. (NYSE:BHP), all of which should benefit strongly from the inevitable higher prices.
China steel production has been far higher than expected, and supposedly in recovery mode while the rest of the world is largely still in a recession, contrary to the assertions we're in a recovery.
Iron Ore Prices
Citibank (NYSE:C) Growing Commodities Unit
Citibank Commodities Unit
Citibank (NYSE:C) is looking to its investment banking division for growth, specifically its commodities unit, which it is focusing on expanding in the near term.
Raw materials and agriculture should be strong sectors for many years, and even with the alleged move by China to tighten its monetary policy, that could be a ploy as it negotiates across a number of sectors for raw materials it needs desperately.
One for sure is iron ore for the steel industry in China, which is booming and a major export for the country.
Precious metals are another sector which China will have great demand for in the years ahead.
With the pressure to cut back on fees in relationship to consumers, banks like Citibank are looking outside of retail banking for growth sectors, and commodities afford some of the best opportunities in the years ahead, even though there could be a lot of ups and downs on the road.
Citibank Commodities Unit
Citibank (NYSE:C) is looking to its investment banking division for growth, specifically its commodities unit, which it is focusing on expanding in the near term.
Raw materials and agriculture should be strong sectors for many years, and even with the alleged move by China to tighten its monetary policy, that could be a ploy as it negotiates across a number of sectors for raw materials it needs desperately.
One for sure is iron ore for the steel industry in China, which is booming and a major export for the country.
Precious metals are another sector which China will have great demand for in the years ahead.
With the pressure to cut back on fees in relationship to consumers, banks like Citibank are looking outside of retail banking for growth sectors, and commodities afford some of the best opportunities in the years ahead, even though there could be a lot of ups and downs on the road.
Citibank Commodities Unit
Saturday, March 6, 2010
China's Steel Industry Future
China's Steel Industry
China is looking to a steel industry future which features a lot less competition and what sounds like consolidation.
Disatisfaction with the performance of their domestic steel industry revealed in comments by the China Iron and Steel Association, which blamed price challenges on the privately-owned mills as the source of their problem.
Evidently they feel the smaller companies have caused profit margins to fall by expanding their capacity, causing too much steel to be offered in the market.
It sounds like the government-run steel industry companies are going to attempt to push the smaller companies out of the business so they can more effectively control what's going on.
Quicker response to accepting iron ore prices from the smaller companies this year threw a wrench in China's attempt to push down contract prices, evidently inferiating the Chinese, although they're not outwardly showing that.
It looks like China will attempt to put the smaller steel mills out of business so they can control the industry more centrally. I think it will backfire on them, but time will tell.
China's Steel Industry
China is looking to a steel industry future which features a lot less competition and what sounds like consolidation.
Disatisfaction with the performance of their domestic steel industry revealed in comments by the China Iron and Steel Association, which blamed price challenges on the privately-owned mills as the source of their problem.
Evidently they feel the smaller companies have caused profit margins to fall by expanding their capacity, causing too much steel to be offered in the market.
It sounds like the government-run steel industry companies are going to attempt to push the smaller companies out of the business so they can more effectively control what's going on.
Quicker response to accepting iron ore prices from the smaller companies this year threw a wrench in China's attempt to push down contract prices, evidently inferiating the Chinese, although they're not outwardly showing that.
It looks like China will attempt to put the smaller steel mills out of business so they can control the industry more centrally. I think it will backfire on them, but time will tell.
China's Steel Industry
Tuesday, February 23, 2010
BHP Billiton (ASX:BHP) Japan Coal Prices
BHP Billiton (ASX:BHP) (NYSE:BHP) Japan Coal Prices
A proposal from BHP Billiton (ASX:BHP) to Japanese steelmakers to increase the price of coking coal provided by the company by 55 percent was greeted with luke warm response from the Japanese, to say the least.
BHP has held its coking coal prices down over the last couple of years, probably the reason it through out such hig percentage increase in prices to test the Japanese response. It also could be an attempt to secure higher prices than they hoped for by presenting such a large increase in the first place.
The Japanese have reportedly rejected the prices asked for, and BHP will now start to negotiate in earnest concerning the prices. This was probably BHP telling the Japanese they'll have to pay a lot more this year for the coking coal.
BHP Billiton (ASX:BHP) (NYSE:BHP) Japan Coal Prices
A proposal from BHP Billiton (ASX:BHP) to Japanese steelmakers to increase the price of coking coal provided by the company by 55 percent was greeted with luke warm response from the Japanese, to say the least.
BHP has held its coking coal prices down over the last couple of years, probably the reason it through out such hig percentage increase in prices to test the Japanese response. It also could be an attempt to secure higher prices than they hoped for by presenting such a large increase in the first place.
The Japanese have reportedly rejected the prices asked for, and BHP will now start to negotiate in earnest concerning the prices. This was probably BHP telling the Japanese they'll have to pay a lot more this year for the coking coal.
BHP Billiton (ASX:BHP) (NYSE:BHP) Japan Coal Prices
Monday, February 15, 2010
BHP (NYSE:BBL), Vale (NYSE: VALE), Iron Ore Contracts
BHP Billiton, Vale, Rio Tinto Iron Ore Prices
According to BHP Billiton (NYSE:BBL) CEO Marius Kloppers, “The market price (for iron ore) is what the benchmark price is supposed to be.” Kloppers added that the benchmark today is about twice what it was last year. Vale (NYSE: VALE) concurs, wanting to see iron ore prices at the annual level reflect spot market levels.
The contentiousness of negotiations between China and BHP Billiton, Vale and Rio Tinto have continued from last year, with the producers expected to want up to 50 percent in annual increases, trying to move away from the benchmark system of pricing.
So far there has been some temporary agreements between some Chinese steelmakers and BHP for a 40 percent in contracted iron ore prices.
With steel prices not rising as quickly as iron ore, it's thought that could decrease the amount the producers are looking for, although the demand and supply factor is again in play this year, which could even temper that scenario.
One way or the other, China as a strong demand for iron ore, and if they want it they're going to have to be willing to pay for it.
Kloppers also made an interesting insight in that he believes that steel production in China will continue to rise in demand over the next 20 years, seeming to signify a bull market in iron ore and steel for some time to come.
“We did a bottom-up analysis, how many buildings, what is the steel
intensity and so on and we think that this trend is going to go on for
the 20 years that we’ve forecast,” he said.
BHP Billiton, Vale, Rio Tinto Iron Ore Prices
According to BHP Billiton (NYSE:BBL) CEO Marius Kloppers, “The market price (for iron ore) is what the benchmark price is supposed to be.” Kloppers added that the benchmark today is about twice what it was last year. Vale (NYSE: VALE) concurs, wanting to see iron ore prices at the annual level reflect spot market levels.
The contentiousness of negotiations between China and BHP Billiton, Vale and Rio Tinto have continued from last year, with the producers expected to want up to 50 percent in annual increases, trying to move away from the benchmark system of pricing.
So far there has been some temporary agreements between some Chinese steelmakers and BHP for a 40 percent in contracted iron ore prices.
With steel prices not rising as quickly as iron ore, it's thought that could decrease the amount the producers are looking for, although the demand and supply factor is again in play this year, which could even temper that scenario.
One way or the other, China as a strong demand for iron ore, and if they want it they're going to have to be willing to pay for it.
Kloppers also made an interesting insight in that he believes that steel production in China will continue to rise in demand over the next 20 years, seeming to signify a bull market in iron ore and steel for some time to come.
“We did a bottom-up analysis, how many buildings, what is the steel
intensity and so on and we think that this trend is going to go on for
the 20 years that we’ve forecast,” he said.
BHP Billiton, Vale, Rio Tinto Iron Ore Prices
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