Steel stocks have witnessed heightened volatility over the last few trading sessions. While the sector continues to be in a broad downtrend, there have been some proverbial dead cat bounces in the last couple of days.
Nonetheless, most steel stocks have lost substantial value since the beginning of 2015, as can be seen in the chart above. U.S. Steel (X), AK Steel (AKS), and ArcelorMittal (MT) have been among the worst-performing steel stocks, losing more than two-thirds of their respective market capitalizations this year.
Nucor (NUE) has been a bit better off, losing only about 18% since the beginning of the year. You can read Nucor’s Mighty Prospects During the Current Steel Industry Slowdown to explore what makes analysts bullish on Nucor despite the overall weakness in the metals space.
Investors looking for diversified exposure to the materials sector could consider the Materials Select Sector SPDR ETF (XLB). Currently, Nucor forms 2.6% of XLB’s portfolio.
What’s driving steel stocks
The steel industry has seen a lot of action in the last week. There have been a series of data points from China, the world’s biggest steel producer. Moreover, some US steel companies have hiked their base steel selling prices.
In this series, we’ll look at some of the recent steel industry indicators. We’ll look at the recent trend in steelmaking raw material prices. These indicators should help you better understand the steel industry’s health.
One of the biggest concerns for steel investors has been rising Chinese steel production despite sagging domestic steel demand. In the next part of this series, we’ll explore how Chinese steel production shaped up in November.