U.S. Steel Corporation
Today, U.S. Steel Corporation (X) announced a $1.2 billion investment toward casting and rolling facilities at Mon Valley Works and cogeneration facilities at its Clairton Works plant. There was a fire at Clairton Works last year.
Whereas U.S. Steel Corporation has been emphasizing long-term benefits of this investment, markets don’t seem impressed. As of 12:40 PM Eastern Time, its stock had fallen 5.8%. Meanwhile, AK Steel (AKS) had fallen 1.7%, and supplier Cleveland-Cliffs (CLF) had risen 0.70%.
Sign up for Bagels & Stox, our witty take on the top market and investment news, straight to your inbox! Whether you’re a serious investor or just want to be informed, Bagels & Stox will be your favorite email.
We saw a flurry of investments from US steel companies after Donald Trump imposed Section 232 tariffs last year. U.S. Steel was quick to restart the blast furnaces at its Granite City facility, and this year, the company announced the commencement of its abandoned EAF (electric arc furnace) project at Fairfield Works. Nucor (NUE) and Steel Dynamics also announced multimillion-dollar projects to enhance their steel production capacity.
Trump has cited these massive investment plans by steel companies to drive home the point that his tariffs have rejuvenated the US steel industry. However, markets (SPY) don’t seem to like these massive investments. Several brokerages have raised concerns of US steel supply rising as new steel plants come online, and US steel prices have deteriorated as domestic competition heats up. U.S. Steel Corporation’s balance sheet already looks stretched with its asset revitalization plan and the Fairfield EAF project.