Nucor Corp

Analysts expect ArcelorMittal (MT) to post revenues of $14.6 billion in 4Q16. The company posted revenues of $14.5 billion in 3Q16 and $13.9 billion in 4Q15.

Cliffs Natural Resources (CLF) was trading at $8.85 on December 23, 2016, which represents a 46% rise since Donald Trump’s win in the US presidential election. That brings the year-to-date rise to a whopping 430.0%.

The United States is the largest steel importer globally. Steel companies such as U.S. Steel Corporation frequently blame steel imports for the US steel industry’s woes.

According to data compiled by Metal Bulletin, spot HRC (hot rolled coil) prices rose from $380 per short ton to $640 per short ton between January 2016 and June 2016.

One of the key features of steel companies’ 3Q16 financial performance was lower-than-expected revenues.

U.S. Steel Corporation (X) released its 3Q16 financial results on November 1 after the market closed, and it held its earnings conference call on November 2.

The bulls and bears have their own sets of arguments about U.S. Steel. U.S. Steel (X) and AK Steel (AKS) mainly use iron ore as a raw material.

US Spot hot rolled coil prices have risen in the ballpark of $200 per short ton in 2016. Spot cold rolled coil prices have risen by ~$300 per short ton.

In this series, we’ll look at the Janus Asset Allocation team’s views on inflation, policy measures, and asset allocation (ITOT) (NEAR), given its assertion that inflation pressures are building.

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) […]

ArcelorMittal (MT) posted adjusted EBITDA of $927 million in 1Q16 and ~$1.4 million in 2Q15.

The EU hasn’t been able to act decisively against higher Chinese steel imports. European steel production has fallen much steeper this year.

Cliffs Natural Resources (CLF) is trading at a forward EV/EBITDA multiple of 11.0x compared with its last five-year average of 8.0x.

In May, ~14.5 million metric tons of steel were produced in the European Union. That was a YoY decline of 5.5%.

In this article, we’ll look at steel companies’ forward EV-to-EBITDA multiples to see if there are some underpriced or overpriced bets in the sector.

Steel companies’ earnings are sensitive to changes in steel prices. In recent quarters, their earnings have been negatively impacted by falling steel prices.

Even the recent uptick in US steel prices has been accompanied by strength in steel scrap prices.

Of 15 analysts covering Cliffs Natural Resources, eight have given it a “hold” recommendation, and seven have given it a “sell” recommendation.

If the Fed continues to raise rates in 2016, we could see the impact on the housing and automotive sectors, which would only add to steel’s woes.

In its 2Q15 results, Cliffs Natural Resources (CLF) downgraded its volume guidance for the USIO division for 2015, from 20.5 million tons to 19 million tons.

Steel companies’ product portfolios and end market exposures can have significant impacts on company performance.

Nucor’s net revenues fell ~18% in 2Q15, compared to the corresponding quarter last year. Most steel companies have reported lesser revenues in 2Q15 as well.

U.S Steel has embarked on an ambitious transformation plan, which it named “Carnegie Way.”

Demand for OCTG products is expected to be subdued in the coming months. This would continue to put pressure on U.S. Steel’s Tubular segment.

U.S. Steel’s Flat-Rolled segment posted negative EBIT of $24 per ton in 2Q15. This represents a slight improvement over 1Q15 results.

ArcelorMittal (MT) released its 2Q15 earnings on July 31. It reported net earnings of $0.2 billion in 2Q15 compared to a loss of $0.7 billion in 1Q15.

U.S. Steel has bounced back from its 52-week low. In fact, most steel company earnings have been better than analyst expectations.

Fewer 2Q15 shipments from U.S. Steel are attributable to its high exposure to the energy sector. The company’s steel product shipments fell steeply in 2Q15.

According to Nucor “Empowerment isn’t a corporate buzzword—it’s a way of life.”

US Steel’s 1Q earnings results came in lower than analyst estimates, and the company’s share price tanked more than 10%.

Steel prices crashed by almost two-thirds at the peak of the global financial crisis in 2009. Last year, they dropped by 10%.

Steel scrap prices fell by ~20% in 2014. Lower steel scrap prices should bring down unit production costs for steel plays.

While iron ore prices crashed, production costs for iron ore haven’t come down. Steel plays’ mining operations have been hit by the fall in iron ore prices.

Steel prices tend to move in tandem with capacity utilization rates. Steel prices are a key factor affecting performance, directly impacting the revenues of companies.

U.S. Steel Corporation’s stock has surged in the past few months, delivering more than 150% growth in the last year.

Nucor recently started production at its DRI plant in Louisiana.

After trying its hands at various businesses, the company finally consolidated the operations in 2001.

Since the products are similar, the switching costs aren’t very high for buyers.

In 2007, the newly merged ArcelorMittal continued its expansion strategy by announcing 35 transactions worldwide.