4.38 -0.02 (-0.45%)
After hours: 7:35PM EDT
|Bid||0.00 x 4000|
|Ask||0.00 x 47300|
|Day's Range||4.36 - 4.44|
|52 Week Range||4.00 - 6.80|
|PE Ratio (TTM)||N/A|
|Earnings Date||Oct 29, 2018 - Nov 2, 2018|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||5.25|
Have Trump’s Tariffs Helped US Steel’s Pursuit of Greatness? U.S. Steel Corporation (X) produces steel in traditional blast furnaces. ArcelorMittal (MT) has a mix of blast furnaces and EAFs (electric arc furnace).
Have Trump’s Tariffs Helped US Steel’s Pursuit of Greatness? With the Section 232 tariffs, the US Department of Commerce is aiming to improve the domestic steel industry’s capacity utilization rate. The US steel industry’s capacity utilization rate has moved past 79% now and could rise above 80% soon, especially as U.S. Steel Corporation (X) ramps up production at its Granite City facility.
Donald Trump was elected as the 45th US president riding his “Make America Great Again” slogan. The slogan found resonance especially among blue-collar workers. The US industrial sector (DIA) has seen jobs shift overseas on lower labor costs in emerging economies such as Mexico and China.
Metal and mining stocks have been on a literal freefall in August. In this part, we’ll discuss the outlook for metal stocks after several stocks traded close to their 52-week lows.
In an interview with the Wall Street Journal, President Trump said that US steel prices are “a little more expensive.” However, according to Reuters, Trump also said that “the 25 percent tariffs on steel will rescue an industry important to U.S. national security.” He added that after the Section 232 tariff implementation, the competition in the US steel industry would be “internal, like it used to be in the old days when we actually had steel, and U.S. Steel was our greatest company.”
As we noted in the previous part, metals and mining stocks like Alcoa (AA) and Freeport-McMoRan (FCX) fell sharply on August 15. US steel stocks like U.S. Steel Corporation (X) and AK Steel (AKS) also saw selling pressure. In this part, we’ll see what has been weighing on metal and mining stocks.
Despite US steel prices hovering near a decade high, steel stocks have sagged this year. Since steel companies’ cash flows have been strong and the balance sheets are in better shape compared to 2015, the question of share buybacks and special dividends came up during several steel companies’ second-quarter earnings calls. In response to a question on share buybacks, David Burritt, U.S. Steel Corporation’s (X) CEO, said, “I think you can look at our first priority now is to pursue profitable growth.
Metals and mining stocks are deeply in the red today. Freeport-McMoRan (FCX) and Alcoa (AA) have fallen 6.6% and 4.4%, respectively, as of 10:10 AM EST. In the steel space, U.S. Steel Corporation (X) and AK Steel (AKS) have fallen 4.1% and 3.3%, respectively.
As we noted previously, steel companies’ cash flows have improved amid higher steel prices (CLF). As cash flows increase, steel companies also face the question of capital allocation. Companies can return cash to shareholders in the form of dividends or share buybacks.
The US steel industry has been plagued by higher imports that are allegedly subsidized by foreign governments. US steel companies were relieved when President Trump imposed the Section 232 tariffs on US steel imports earlier this year. The tariffs were tightened more after President Trump refused to extend the temporary exemptions for NAFTA and the European Union. President Trump has authorized doubling the Section 232 tariffs to 50% on Turkish steel.
In this part, we’ll discuss steel companies’ second-quarter free cash flows. The free cash flow is the operating cash flow minus the capital expenditure. Free cash flows are a key metric for investors in capital-intensive industries like steel.
In the previous part, we discussed steel companies’ second-quarter earnings. In this part, we’ll see what different steel companies had to say about their third-quarter guidance during their second-quarter earnings call.
AK Steel’s (AKS) second-quarter EBITDA fell 11.4% YoY (year-over-year) to $148 million. AK Steel is the only company among the steel stocks that we’re covering in this series that has posted a yearly fall in its second-quarter EBITDA. U.S. Steel Corporation (X) posted an EBITDA of $451 million in the second quarter—compared to $255 million in the first quarter and $362 million in the second quarter of 2017. The company’s adjusted EBITDA rose 24.6% YoY. While U.S. ...
Steel companies sell steel either in the spot market or to contract customers. In contract pricing, several annual contracts roll over at the beginning of the year. As we noted previously, AK Steel’s (AKS) ASP (average selling price) growth has lagged other steel companies (CLF). The lag could be attributed to the higher percentage of contract sales in AK Steel’s product mix. Since most of the contracts rolled over before to the spike in steel prices, AK Steel couldn’t reap the full benefits from higher spot steel prices. ...
Previously in this series, we compared steel companies’ second-quarter shipments. In this part, we’ll look at their ASP (average selling price). The ASP is a key driver of steel companies’ performance. The ASP tends to impact companies’ profitability.
In the previous part, we discussed steel companies’ second-quarter shipments. In this part, we’ll see what could drive steel companies’ shipments in the third quarter and beyond.
Steel companies’ revenues are a function of average steel prices and shipments. So, steel investors should follow quarterly production and shipment data. In this part, we’ll compared steel companies’ second-quarter shipments.
The second-quarter earnings season is nearly over. All of the major US steel companies have released their second-quarter reports. To some extent, the second-quarter earnings season was similar to the first quarter. Nucor (NUE) and Steel Dynamics (STLD) posted better-than-expected earnings.
US steel stocks are in the red today. As of 1:30 PM ET, U.S. Steel Corporation (X) and AK Steel (AKS) are respectively trading down 1.1% and 2.4%. Today, the Turkish currency fell to record lows amid the country’s rising frictions with the United States.
Is Cleveland-Cliffs Well Placed amid Changing US Steel Dynamics? Steel prices are a major driver of steelmakers’ earnings and revenues. According to S&P Global Platts, US (SPY) steel prices rose 17.5% on average in 2017 compared to 2016.
ArcelorMittal (MT), the world’s largest steel producer, released its second-quarter earnings on August 1. It reported revenues of $19.9 billion in the second quarter, compared to $19.2 billion in the first quarter.
US steel production is the key variable that drives US steelmakers’ (SLX) (XME) revenues. AK Steel (AKS) and ArcelorMittal (MT) are Cleveland-Cliffs’ (CLF) customers. Investors track production data to get a sense of the direction of overall volumes.
Cleveland-Cliffs’ (CLF) customers, including AK Steel and ArcelorMittal, are directly affected by steel imports into the United States. As a result, investors should track these data to get a sense of the future shipment outlook for CLF.
China is the world’s largest steel producer, consumer, and exporter. Chinese steel exports form a minuscule amount of US steel imports. However, the country’s steel exports still impact US steel companies like U.S. Steel (X), AK Steel (AKS), and Nucor (NUE), as higher Chinese steel exports put pressure on global steel prices, which eventually impacts the US steel pricing environment. Notably, US steel prices have risen sharply this year, hurting earnings of some of the end users. The industrial sector (DIA) has underperformed this year amid the US-China trade war scare.