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.
Showing posts with label Steel Prices. Show all posts
Showing posts with label Steel Prices. Show all posts
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.
Tuesday, July 27, 2010
U.S. Steel (NYSE:X) Losses Confirm Slow Economy
United States Steel Corp. (NYSE:X) reported a second-quarter loss, even though they were able to double sales during the quarter over last year.
Considering the deep recession last year, that isn't an unexpected result, and doesn't say much to the performance of the company or an improved economy.
US Steel did attempt to spin the results as a "sharp turnaround," which when comparing numbers is true, but again, needs to really be compared with numbers in a healthy economy to give an accurate measurement of the their performance.
Losses for the quarter came to $25 million, or 17 cents a share, a definite improvement over the loss of $392 million last year during the same quarter, or $2.92 a share.
Even with sale doubling to $4.68 billion, it shows margins were low and the ability to raise prices minimal. The company stated the increased revenue was also hindered by operating expenses, which had almost doubled over the same quarter in 2009.
Guidance wasn't very impressive from the steel giant either, as they did say they expect to generate a profit in the third quarter, but falling orders and lower steel prices will have operating results underperform.
Considering the deep recession last year, that isn't an unexpected result, and doesn't say much to the performance of the company or an improved economy.
US Steel did attempt to spin the results as a "sharp turnaround," which when comparing numbers is true, but again, needs to really be compared with numbers in a healthy economy to give an accurate measurement of the their performance.
Losses for the quarter came to $25 million, or 17 cents a share, a definite improvement over the loss of $392 million last year during the same quarter, or $2.92 a share.
Even with sale doubling to $4.68 billion, it shows margins were low and the ability to raise prices minimal. The company stated the increased revenue was also hindered by operating expenses, which had almost doubled over the same quarter in 2009.
Guidance wasn't very impressive from the steel giant either, as they did say they expect to generate a profit in the third quarter, but falling orders and lower steel prices will have operating results underperform.
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