US steel industry
It’s been almost a year since OPEC (Organization of the Petroleum Exporting Countries) decided to maintain its daily crude oil output on the fateful day of November 27, 2014. Since then, commodities have had their worst run since the global financial crisis of 2008–2009. Metal companies’ lackluster performance has run into November as well. What’s more disturbing is that it only seems to get worse for the companies operating in the industrial metals space.
Looking at steel, most steel stocks continue to trade near their 52-week lows. U.S. Steel Corporation (X) closed at $8 on November 23. While analyzing U.S. Steel’s 3Q15 financial results, we discussed why the company’s outlook looked bleak and the stock could correct even more.
U.S. Steel’s stock has fallen more than 70% year-to-date (or YTD). Other steel companies aren’t far behind in this global commodity carnage. AK Steel (AKS) and ArcelorMittal (MT) have lost 60% and 55% YTD, respectively. Nucor (NUE) has been relatively better off, losing 17% of its market capitalization this year. Read Nucor’s Mighty Prospects during the Current Steel Industry Slowdown to learn more about Nucor. Please note that Nucor is the only US steel company to carry an investment grade (BND) credit rating.
In this series, we’ll look at some of the recent steel industry indicators. We’ll look at the recent trend in steel as well as steelmaking raw material prices. We’ll also analyze some of the recent indicators of the Chinese real estate industry. These indicators should help you better understand the steel industry’s health.
One of the biggest concerns for steel investors has been the global oversupply. In the next part of this series, we’ll look at how steel production shaped up in October.