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These Variables Could Drive Cleveland-Cliffs Higher

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Sep. 6 2017, Updated 5:36 p.m. ET

Key indicators

After experiencing a great 2016, US steel stocks (SLX) are having a tepid 2017. While import duties and the US Presidential election served as an initial shot in the arm for the US steel sector, a similar boost has been missing in 2017.

US steelmakers were expecting support from Donald Trump’s protectionist stance as well as his promised investments in infrastructure, but so far, none of this has quite materialized.

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Price performances

Among the major stocks impacted by the performance of the US steel sector, AK Steel (AKS) is trading at the highest YTD (year-to-date) loss of 44.3% as of September 1, 2017. U.S. Steel (X), Nucor (NUE), and Steel Dynamics (STLD) have seen returns of -18.2%, -6.8%, and -2.3%, respectively. Only ArcelorMittal (MT) and Cleveland-Cliffs (CLF) have seen positive YTD price actions, at 25.0% and 0.8%, respectively.

Notably, the initial euphoria surrounding the Section 232 probe into steel imports that started in April 2017 has by now died down.

Series overview

To understand the expected future trend in Cleveland-Cliffs’ stock, it’s important to understand the dynamics of the US steel market and the seaborne iron ore market. In this series, we’ll look at steel demand-supply indicators, including steel demand, US steel production, steel prices, and imports.

We’ll also analyze factors such as the Chinese steel demand outlook, the supply situation, and the price outlook.

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