Steel industry midyear review

We are now halfway into 2018. After a strong start to the year, US steel stocks have pared their 2018 gains. AK Steel (AKS) is deep into the red for the year while U.S. Steel Corporation (X) and Nucor (NUE) are almost flat for the year. 

ArcelorMittal (MT), the world’s largest steel producer, lost 10.7% in the first half of the year. Cleveland-Cliffs (CLF), which supplies iron ore to US-based steel producers, gained 16.9% over this period.

The Steel Industry’s Midyear Review: Outlook Gets Murky

This has been an interesting year for the US steel industry. In March, President Trump imposed a 25.0% tariff on steel imports. The tariffs were subsequently relaxed for some countries. However, the temporary exemptions for NAFTA and the European Union weren’t extended beyond May.

Series overview

Despite the Section 232 tariffs that were intended to protect the domestic steel industry from unfairly traded steel products, the markets haven’t warmed up to steel stocks, as is visible in their dismal 2018 price action. In this series, we’ll explore why US steel stocks are having a lackluster year despite President Trump’s efforts to revive the US steel industry. We’ll also see how US steel stocks are placed for the second half of the year.

Let’s begin by analyzing what’s been ailing US steel companies this year.

Latest articles

JCPenney (JCP) is slated to announce its results for the first quarter of fiscal 2019, which ended on May 4, on May 21.

17 May

What to Know about the US-China Trade War

WRITTEN BY Mayur Sontakke, CFA, FRM

The key point of contention in the US-China trade dispute is the large trade deficit the United States runs against China.

On May 16, the Labor Department reported jobless claims for last week. Initial jobless claims fell by 16,000 to 212,000 for the week ended May 11.

Jeffrey Gundlach recommended investors take advantage of the volatility in interest rates at the recent Sohn Conference.

Tesla (TSLA) has fallen 4.2% as of 11:55 AM EDT on May 17. While US equity markets opened in the red today, they've recouped their losses.

According to Reuters, on May 16, Vale (VALE) told prosecutors that a dam was at risk of rupturing at its Gongo Soco mine.