Why Is U.S. Steel Corporation Getting Battered?

U.S. Steel Corporation (X) is having a terrible run in September. Based on the closing prices on September 25, the stock has lost 9.5% in September. So far, the stock has fallen 27.0% YTD (year-to-date). Overall, 2017 hasn’t treated steel stocks well. AK Steel (AKS) and Nucor (NUE) are also trading with YTD losses. However, ArcelorMittal (MT), which gets only about a quarter of its revenues from NAFTA (North American Free Trade Agreement), managed to buck the trend. ArcelorMittal is trading with YTD gains.

Looking at U.S. Steel Corporation, the stock started 2017 on a positive note. However, the company had massive 1Q17 earnings miss when it posted a surprise loss, which triggered a selling spree in the stock. U.S. Steel Corporation lost more than a quarter of its market capitalization after its 1Q17 earnings miss. While the stock saw some upward price action in July and August and managed to erase some of its 2017 losses, it has come under selling pressure in September.

There have been some interesting developments in the steel space in the past week. We have seen selling pressure in iron ore and Chinese steel prices. US steel prices have also shown signs of softening. While US steelmakers expected the Trump Administration to rescue them from higher imports, some of the recent statements might have diminished the hopes of an immediate reprieve.

As the steel market sentiments turned somber, some of the analysts have also taken a bearish view on steel stocks (XME). In this series, we’ll see how these factors are impacting U.S. Steel Corporation.