Morgan Stanley is bearish on the future prospects of iron ore prices. The broker estimates that the iron ore prices will fall to $40 per ton in 2H16 and $35 per ton in 4Q16.
Valuations Valuation multiples are key metrics that investors consider carefully. With the help of relative valuations, we can compare a company’s valuation with its closest peers’ valuations. There are several valuation metrics that we can use. For companies in cyclical industries such as steel and mining, the EV/EBITDA (enterprise value to earnings before interest, taxes, depreciation, and amortization) […]
Steel companies’ earnings are sensitive to changes in steel prices. In recent quarters, their earnings have been negatively impacted by falling steel prices.
AK Steel’s 1Q16 steel shipments declined by 5% as compared to the corresponding quarter last year. U.S. Steel’s 1Q16 flat-rolled steel shipments also fell.
Based on closing prices on April 18, Freeport is trading 32% above its 100-day moving average. Teck Resources (TCK) is trading 45% above its 100-day MA.
Energy prices have been a key driver of commodity prices over the last few quarters. They recovered from their January lows. Copper also piggybacked energy.
Valuation multiples are a key metric that smart investors consider. With the help of relative valuations, we can assess a company’s valuation with respect to its closest peers’ valuations.
Integrated operations have been one of the factors driving steel companies’ recent performances. Iron ore and coal mining fall under steel companies’ upstream operations.
