US Steel Stocks Staged a Comeback in Holiday-Shortened Week

Mohit Oberoi, CFA - Author

Nov. 28 2017, Updated 7:32 a.m. ET

Steel stocks

Last week was positive for US steel stocks. AK Steel (AKS) was the best-performing stock among the steel stocks we’re covering in this series with gains of 8.2% in the week ending November 24. Nucor (NUE) and Cliffs Natural Resources (CLF) rose 2.0% and 7.8%, respectively, while U.S. Steel (X) rose 7.0%. ArcelorMittal (MT), the world’s largest steel producer, rose 4.6% in the last week.

The broader markets (SPY) (SPX) rose 0.81%, while the SPDR S&P Metals and Mining ETF rose 3.9% last week. Notably, commodities have outperformed equity markets this year. Better-than-expected demand in China, which consumes almost half of all industrial metals, has lifted metal prices this year. China’s supply-side reforms to curtail its polluting industrial plants have further boosted some metals like steel and aluminum.

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Key drivers

The last week started on a positive note for US steel stocks. Steel market sentiment improved further on Tuesday after Credit Suisse upgraded AK Steel from a “neutral” to “buy.” The brokerage also raised AK Steel’s price target from $6 to $7. Notably, AK Steel has been the worst-performing steel stock this year among our select group of steel stocks. However, it has outperformed the broader steel space for two consecutive weeks.

Series overview

In this series, we’ll take a look at the major macro developments that impacted US steel stocks in the week ending November 24. We’ll also look at some of the company-specific developments that impacted steel stocks. Finally, we’ll discuss the various data points that steel investors should follow this week.


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