China or Trump?
Steel stocks were among the biggest gainers in 2016 as Donald Trump’s election fueled a rally on expectations of higher demand and supportive trade policies.
However, 2017 has been a mixed basket at best for leading steelmakers. While ArcelorMittal (MT) is still trading with year-to-date (or YTD) gains, U.S. Steel and Nucor (NUE) have lost most of their 2017 gains.
Notably, both Nucor and Steel Dynamics (STLD) had previously impressed markets with their better-than-expected 1Q17 guidances. You can read 1Q17 Guidance: What Makes Steel Companies Optimistic? to explore more about Nucor’s 1Q17 guidance.
In this series, we’ll look at recent steel industry indicators, analyze how steel is shaping up, and gather a sense of how steel companies could perform beyond the current quarter.
Because commodity prices are affected by domestic and global dynamics, we’ll also look at domestic and international economic indicators. It’s worth noting that the rally in steel stocks has been led by improved global dynamics, especially in China. Therefore, it’s pertinent for steel investors to follow both US and international economic indicators.
Because lower imports have been key drivers of US steel prices, it’s also important for steel investors to follow monthly steel import data releases. Continue to the next article for a detailed analysis of February’s steel import data.