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Key Indicators US Steel Investors Should Track in 3Q17

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Key indicators

Steel stocks have been consolidating for the last few trading sessions. However, despite a presumably supportive Trump administration and a rebound in the Chinese steel industry, US steel stocks are having a tepid year.

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Price action

Looking at individual stocks, U.S. Steel Corporation (X) and AK Steel (AKS) are trading with YTD (year-to-date) losses of 29.8% and 47.2%, respectively. Both of these stocks more than quadrupled last year as the markets priced in a stricter stance against steel imports under the Trump administration. President Trump ordered a probe under Section 232 of the Trade Expansion Act of 1962 to investigate whether steel imports threaten US national security. A similar probe was ordered for aluminum imports. However, despite the initial euphoria, it looks like the probe might be delayed, and the final findings might not be as prohibitive as steel producers previously expected. You can read Section 232 Probe: Has Nucor Toned Down Its Expectations? to find out what steel companies expect from the Section 232 probe.

Series overview

In this series, we’ll look at some of the steel demand-supply indicators to gauge the US steel industry’s health (NUE) (CLF). Since the US steel industry is affected by domestic as well as global factors, we’ll look at some of the key global economic indicators, especially China’s. Steel imports are an important indicator for investors to follow. In the next part of this series, we’ll look at July’s steel import data (XME).

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