uploads///building _

U.S. Steel Sinks Even as CEO Says Trump Won’t ‘Blink’ on Tariffs

By

Dec. 7 2018, Updated 2:46 p.m. ET

U.S. Steel

US steel stocks are in the red today, following the broader markets (DIA) lower. Looking at the leading steel names, U.S. Steel Corporation (X) and AK Steel (AKS) are trading at falls of 2.3% and 2.7%, respectively, as of 2:05 PM EST.

ArcelorMittal (MT) has fallen 1.8%, while Cleveland-Cliffs (CLF) is flat for the day.

Yesterday, in an interview, U.S. Steel’s CEO, David Burritt, praised President Donald Trump’s economic policies. Burritt also said that he believes Trump “will not blink” and hailed the “level playing field” following the tariffs.

Article continues below advertisement

Section 232 tariffs

In March, Trump imposed a 25% tariff on US steel imports and a 10% tariff on aluminum imports. While the tariffs have lifted steel companies’ second- and third-quarter earnings, their price action has been dismal so far, with AK Steel and Steel Dynamics seeing fresh 52-week lows today.

What now?

Steel companies’ valuations look lower if not outright enticing. However, valuing cyclicals such as steel is a tricky exercise, as the steel industry’s earnings aren’t as linear as those of some others. US steel companies’ earnings should fall next year considering current spot steel prices. However, analysts’ 2019 earnings estimates don’t seem to have factored in the current downtrend in steel prices.

Having said that, unless we’re heading into a full-blown slowdown next year, steel stocks look to offer reasonable value now. Read Could Battered Steel Stocks Witness a Santa Claus Rally? for more on steel’s outlook.

Advertisement

More From Market Realist

  • New home construction
    Basic Materials
    How Investors Can Play Surging Lumber Prices in 2021
  • MP Materials mine
    Basic Materials
    MP Materials (MP) Is an Attractive Play on Rare Earths
  • Woman looking at data
    Basic Materials
    Should You Buy SLV Stock Before Another Silver Short Squeeze?
  • Freeport-McMoRan employee at a facility
    Basic Materials
    FCX Stock Is a Good Buy for Investors as Copper Prices Top $10,000
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.