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Comparing US Steel’s 3Q16 Average Selling Price to Its Peers

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3Q16 average selling prices

Steel companies’ earnings are sensitive to changes in steel prices (DBC). After a steep rally in the first half of the year, US flat steel prices came under severe pressure in 3Q16.

A seasonal demand slowdown coupled with sticky imports negatively impacted US steel pricing in the quarter. Let’s see how falling spot steel prices impacted various steel companies’ 3Q16 average selling prices (or ASP).

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Selling prices rose

  • United States Steel (X) reported ASP of $663 per ton in 3Q16, a year-over-year rise of almost 1.0%. Its 3Q16 ASP rose ~10.0% on a sequential basis.
  • Nucor (NUE) reported ASP of $729 per ton in 3Q16. Its ASP was $658 per ton in 2Q16 and $718 per ton in 3Q15.
  • AK Steel’s (AKS) 3Q16 ASP rose 11.0% compared to 3Q15. It was the highest yearly rise in ASP among the companies that we’re covering in this series. The sharp rise could be attributed to its decision to cut its exposure to low-priced commodity-grade spot shipments.
  • ArcelorMittal (MT) reported average selling prices of $601 per ton in 3Q16. To put this in context, it reported ASP of $560 per ton in 2Q16 and $614 per ton in 3Q15.

It might sound counterintuitive that steel companies managed to report higher ASP in 3Q16 despite the sequential fall in spot pricing. We’ll explore that in detail in the next part.

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