Key Economic Indicators That Steel Investors Should Track



Steel: A global commodity

In our previous series about the Strength of the Steel Industry, we analyzed some key economic indicators in the US. We noted that US steel prices appear to have bottomed out and that some companies, including AK Steel (AKS) and ArcelorMittal (MT), have started raising steel prices. According to reports, Nucor (NUE) has also raised the prices for some of its steel products.

[marketrealist-chart id=475488]

Together, Nucor and U.S. Steel Corporation (X) form ~8% of the SPDR S&P Metals and Mining ETF (XME). XME has underperformed the broader US markets, as the chart above shows.

Steel is a global commodity. Steel companies in the United States are affected by developments in the global steel industry. China, India, Japan, and Europe are among the world’s major steel consumers.

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What do we cover in this series?

In this series, we’ll analyze the latest trends in the Chinese steel industry. China (FXI) is the world’s largest producer and consumer of steel products.

Chinese steel industry

We’ll discuss how China’s steel demand is shaping up by looking at several key economic indicators that investors can track. The Chinese construction industry is the most important driver of global steel demand. In the coming parts of this series, we’ll analyze some key indicators of China’s real estate sector.

We’ll also analyze the recent trends in China’s steel production sector. While Chinese steel demand is expected to contract by 6% year-over-year, Chinese steel producers haven’t proportionally cut production. Overproduction is creating a glut of steel on international markets.

In the next part of this series, we’ll discuss how Chinese real estate indicators looked in May.


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