|Bid||0.00 x 1200|
|Ask||0.00 x 800|
|Day's Range||24.57 - 25.00|
|52 Week Range||23.80 - 37.50|
|Beta (3Y Monthly)||3.36|
|PE Ratio (TTM)||5.09|
|Earnings Date||Feb 21, 2017 - Feb 27, 2017|
|Forward Dividend & Yield||0.10 (0.39%)|
|1y Target Est||41.74|
As noted in the previous articles, US steel companies’ earnings have improved this year after Section 232 tariffs lifted US steel prices. In this article, we’ll see what companies are doing with their bumper earnings.
In this part, we’ll discuss steel companies’ third-quarter free cash flows. Free cash flow is operating cash flow minus capital expenditure. U.S. Steel (X) generated free cash flows of $164 million in the third quarter as compared to $219 million in the second quarter and $128 million in the third quarter of 2017.
India's two biggest private sector steel companies JSW Steel Ltd and Tata Steel Ltd are banking on their diversified product mix to take on steel giant ArcelorMittal SA as it gears up to enter the country. In October, creditors of bankrupt Essar Steel India approved a 500 billion rupee ($6.9 billion) joint offer by ArcelorMittal and Japan's Nippon Steel & Sumitomo Metal for Essar's assets, paving the way for the first major foreign bets on steel manufacturing in India.
US steel prices rose sharply in the first half of 2018 as President Trump’s Section 232 tariffs lifted US steel prices with the benchmark HRC (hot roll coil) prices rising to a decade high. Higher spot steel prices supported US steel companies’ average selling prices (or ASP) in the last two quarters. However, spot steel prices fell last month. Although prices have stabilized after companies like Nucor (NUE) and ArcelorMittal (MT) announced price hikes, they are still below their 2018 highs.
Previously in this series, we compared steel companies’ third-quarter shipments. In this part, we’ll look at their ASP (average selling price). The ASP is a key driver of steel companies’ performance and impacts their profitability. We saw a sharp rise in steel companies’ ASP this year after President Trump’s Section 232 tariffs lifted US steel prices (SPY) to multiyear highs.
As noted previously, steel companies like ArcelorMittal (MT), Nucor (NUE), and AK Steel (AKS) reported lower sequential shipments in the third quarter. ArcelorMittal also pointed to “temporary market weakness in the US.” According to Steel Dynamics, “customers took a temporary purchasing hiatus in anticipation of lower transaction prices as scrap pricing dipped a little and imports moderated some.” However, Nucor’s response was a bit more nuanced.
Steel companies’ revenues are a function of average steel prices and shipments. In this part, we’ll compare steel companies’ third-quarter shipments.
We’re towards the end of the third-quarter earnings season, and all of the leading US steel producers have released their quarterly earnings. Steel Dynamics was the first major steel company to release its quarterly results on October 17. Nucor (NUE) released earnings on October 18.
Luxembourg, 13 November 2018 - With reference to Article 19(3) of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse.
As we noted previously, steel stocks like AK Steel (AKS) and ArcelorMittal (MT) are trading with a year-to-date loss. Steel stocks have underperformed broader equity markets (DIA) in 2018 despite President Trump’s Section 232 tariffs. In this part, we’ll discuss the key reasons why bears love steel stocks.
Now, we’re towards the end of the third-quarter earnings season. Talking of steel stocks, all of the leading US steel producers have released their quarterly earnings. Steel Dynamics was the first major steel company to release its quarterly performance on October 17. Nucor’s (NUE) earnings were released on October 18.
In the final article of this series, we’ll look at Cleveland-Cliffs’ (CLF) valuation and compare it to those of its US steel peers (SLX). Among US (SPY) steel stocks (XME), U.S. Steel Corporation (X) and ArcelorMittal (MT) are trading at the lowest forward EV-to-EBITDA multiples of 3.06x and 3.65x, respectively. Cleveland-Cliffs, on the other hand, is trading at the highest multiple of 5.9x.
SA reached a tentative deal on a new labor contract covering about 15,000 workers after several months of negotiations. The four-year agreement for workers includes wage increases between 3% and 4% each year and a $4,000 ratification bonus. “The proposed four-year agreement mirrors the industry standard on wages, lump-sum payments and pensions and maintains or improves our existing health-insurance benefits for active and retired Steelworkers and their dependents,” the steelworkers union said in prepared remarks.
US steel production is the key factor driving US steelmakers’ (SLX) (XME) revenues. Investors track production data to get a sense of the direction of overall volumes.
As noted in the previous article, Chinese steel production is up handsomely this year and is running at record levels. China’s car sales have fallen for three consecutive months. China is the world’s largest automotive market.
ArcelorMittal's (MT) Q3 results benefit from higher steel selling prices. The company also keeps 2018 outlook unchanged citing favorable market conditions and healthy demand.
In the previous articles, we looked at indicators pertaining to the US steel industry. Steel production is a key metric that investors should track, as it gives insight into the supply side of the equation. According to the World Steel Association, global steel production rose 4.4% YoY in September.
A divestment by ArcelorMittal and upbeat trading statements from IAG and Paddy Power Betfair were the highlights of the European corporate slate on Friday
(MT.AE) said Friday that it has received a binding offer from Liberty House Group for its Dudelange operation in Luxembourg and some of its finishing lines in Belgium. The deal is the final part of a divestment package agreed to by ArcelorMittal in order to gain approval from the European Commission for its acquisition of Italy’s Ilva SpA, the company said. The Belgian assets comprise ArcelorMittal’s hot-dipped galvanizing lines 4 and 5 in Flemalle and its hot-rolled pickling, cold rolling and tin packaging lines in Tilleur.
The assets are the final part of a divestment package the Company agreed with the European Commission (‘EC’) during its merger control investigation into the Company’s acquisition of Ilva S.p.A (‘Ilva’).
Steel prices are the key driver of steel companies’ earnings. We saw a sharp rally in US steel prices this year after Section 232 tariffs. Steel companies like Nucor (NUE) and Steel Dynamics (STLD) are posting record earnings amid higher US steel prices. AK Steel (AKS) also posted its highest third-quarter earnings in a decade. Cleveland-Cliffs (CLF) also benefits from higher US steel prices.
So far in this series, we’ve looked at US steel supply indicators like domestic production and imports. Along with supply, we also need to look at steel demand indicators. In this article, we’ll look at some indicators of US steel demand (SPY).
ArcelorMittal (MT.AS), the world's largest steelmaker, expects its financial results to improve in the coming months as global economic growth drives demand and U.S. tariffs lead to higher prices for the metal. Arcelor reported a 42 percent year-on-year increase in third-quarter core profit (EBITDA) to $2.73 billion (2.11 billion pounds), roughly in-line with analyst expectations, while sales rose 5 percent to $18.5 billion. The steel market has been impacted this year by the 25 percent import tariffs put in place by U.S. President Donald Trump to try to reduce imports from China and Europe.