Reliance Steel and Aluminum

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  • Basic Materials

    Overview: US Steel’s performance versus its peers

    Lower margins are a reflection of the efficiency of a company.

    By Mohit Oberoi, CFA
  • uploads///part
    Company & Industry Overviews

    What’s Driving the Current Uptrend in US Steel Prices?

    Spot steel prices in the US (DIA), especially in the flat-rolled segment, have risen over the last month.

    By Mohit Oberoi, CFA
  • uploads///construction
    Macroeconomic Analysis

    Engineering Alcoa’s Success In 2015

    Alcoa’s engineered products and services In the previous part of this series, we discovered that the engineered products and services segment is Alcoa’s (AA) most profitable. In this part, we’ll look at two factors that will drive this part of the business in 2015. Non-residential construction Alcoa earns almost $1 billion in revenues from the non-residential construction industry. Non-residential construction is picking up, […]

    By Mohit Oberoi, CFA
  • uploads///last
    Macroeconomic Analysis

    How Do Aluminum Inventories Work?

    Aluminum inventories with London Metal Exchange (or LME) registered warehouses have declined this year. Aluminum inventories have been on a decline for almost two years.

    By Mohit Oberoi, CFA
  • uploads///last
    Earnings Report

    Are Century Aluminum’s Valuations Looking More Attractive?

    In this part, we’ll look at Century Aluminum’s valuation multiples after its 2Q15 earnings release.

    By Mohit Oberoi, CFA
  • Basic Materials

    Why investors need to understand the cost curve

    Primary aluminum and alumina are commodity products. Producers don’t have much control over their pricing. The prices are decided by market dynamics.

    By Mohit Oberoi, CFA
  • Basic Materials

    Must-know: An investor’s guide to Nucor’s supply chain

    To fulfill its iron ore requirements, Nucor has a DRI plant in Trinidad.

    By Mohit Oberoi, CFA
  • Basic Materials

    Why metal service centers are important for U.S. Steel

    Metal service centers account for about one-fifth of U.S. Steel’s total revenues. This makes these centers an important customer segment for the company.

    By Mohit Oberoi, CFA
  • Basic Materials

    Why Alcoa is positioned well to serve the automotive industry

    Alcoa is working to expand its capacity in Tennessee. It’s a $275 million investment. Alcoa expects that the facility will be operational by mid-2015.

    By Mohit Oberoi, CFA
  • uploads///last reliagn
    Company & Industry Overviews

    Alcoa Realigns Downstream Segment after RTI Metals Acquisition

    Alcoa split its downstream business into two segments. The first segment would focus on the aerospace sector, and the other segment would serve the construction and commercial wheels market.

    By Mohit Oberoi, CFA
  • uploads///wor pm
    Earnings Report

    Worthington Industries’ Revenue and Income Fell in Fiscal 2Q16

    Worthington has a market cap of $1.7 billion. After the fiscal 2Q16 earnings report, it rose by 0.11% to close at ~$27.0 per share as of December 16.

    By Gabriel Kane
  • uploads///PENETRATION
    Macroeconomic Analysis

    Steel Import Penetration Remains at Elevated Levels

    Let’s look at steel’s import penetration levels. Simply put, import penetration tells us how much of the domestic steel demand is met through imported steel.

    By Mohit Oberoi, CFA
  • uploads///st
    Basic Materials

    How Investors Can Play The Steel Industry

    Steel is a cyclical industry and is dependent on the growth in economic activity. In this series, we’ll learn key facts related to the steel industry and how investors can play the steel industry.

    By Mohit Oberoi, CFA
  • uploads///final
    Basic Materials

    Economic growth stages and steel: The must-know dynamics

    A key metric to watch with commodities like steel is per-capita consumption. U.S. consumption of 306 kilograms (or kg) is better than the world average, which stands at 217 kg.

    By Mohit Oberoi, CFA
  • Basic Materials

    Key drivers of steel consumption: A must-know overview

    Steel serves as a raw material for various industries. You and I don’t consume the crude steel that’s produced in factories directly.

    By Mohit Oberoi, CFA
  • Basic Materials

    Must-know: Why capacity utilization affects steel producers

    In simple terms, the “capacity utilization rate” refers to the actual production compared to the maximum production possible through existing plants.

    By Mohit Oberoi, CFA
  • Basic Materials

    Why steel is an essential commodity—the backbone of an economy

    It shouldn’t surprise you that steel consumption fell by as much as 50% in some countries during the recession of 2008.

    By Mohit Oberoi, CFA
  • uploads///process
    Basic Materials

    Steelmaking: An investor’s guide to the raw materials and process

    Iron ore, steel scrap, and coal are three main raw materials for steelmaking. Steelmaking is a raw material–intensive business.

    By Mohit Oberoi, CFA
  • uploads///part  spreads
    Basic Materials

    US Steel Mills Are Pushing for Price Hikes

    Some US steel mills including ArcelorMittal USA (MT) and Nucor (NUE) pushed for a price hike earlier this month.

    By Mohit Oberoi, CFA
  • uploads///part
    Basic Materials

    What Has Driven Steel Prices in 2016?

    Spot steel prices in the US, especially in the flat-rolled segment, have risen in 2016. Higher base metal prices helped build momentum in steel prices.

    By Mohit Oberoi, CFA
  • uploads///steel price part
    Company & Industry Overviews

    What Slowdown? US Steel Prices Rose 50% This Year

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

    By Mohit Oberoi, CFA
  • uploads///service center
    Company & Industry Overviews

    How Are Metal Service Centers Managing Their Steel Inventories?

    While service center steel inventories declined by more than 22% YoY in April, they were almost flat compared to March.

    By Mohit Oberoi, CFA
  • uploads///part  service center
    Macroeconomic Analysis

    What Does the Falling Service Center Steel Inventory Tell Us?

    During the fiscal 3Q15 earnings call, most steel producers said that the service center buying activity was subdued in the quarter.

    By Mohit Oberoi, CFA
  • uploads///wor pbv
    Earnings Report

    How Does Worthington Industries Compare to Its Peers?

    The PE ratios of Worthington Industries, Nucor, Alcoa, and Reliance Steel & Aluminum are 28.1x, 19.7x, 23.7x, and 12.9x, respectively, as of December 16.

    By Gabriel Kane
  • uploads///part  service center inventory
    Macroeconomic Analysis

    US Service Center Steel Buying Continues to Sag

    Lower steel demand from service centers is negatively impacting steel companies’ shipments. Almost all steel companies expressed concern over the lower service center buying activity.

    By Mohit Oberoi, CFA
  • uploads///XME
    Macroeconomic Analysis

    Weakening Industrial Commodities Pull September Payrolls Down

    US non-farm payrolls added 142,000 jobs in September compared to 173,000 in August, below the consensus estimate of 203,000. The unemployment rate remained unchanged at 5.1%.

    By Lara Sheldon
  • uploads///carnegie way
    Earnings Report

    U.S. Steel Generates Substantial Cost Savings under Carnegie Way

    U.S. Steel is investing $230 million in constructing an electric arc furnace at its facility in Fairfield Works, Alabama. The construction is expected to be completed by 3Q 2016.

    By Mohit Oberoi, CFA
  • uploads///guidance  ebitda
    Earnings Report

    Can ArcelorMittal Deliver Its 2015 Earnings Guidance?

    In the previous parts of this series, we’ve analyzed ArcelorMittal’s (MT) 2Q15 financial results. Now, we’ll explore the company’s outlook.

    By Mohit Oberoi, CFA
  • uploads///part  europe
    Earnings Report

    U.S. Steel Delivers a Profit in Europe in 2Q15

    Steel demand indicators in Europe continue to be strong. Yet U.S. Steel’s shipments in Europe fell 15% in 2Q15 as compared to the previous quarter.

    By Mohit Oberoi, CFA
  • uploads///part  tubular
    Earnings Report

    Losses Widen in U.S. Steel’s Tubular Segment as Fixed Costs Rise

    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.

    By Mohit Oberoi, CFA
  • uploads///cash convesrion cycle
    Earnings Report

    AK Steel Improves Its Cash Conversion Cycle in 2Q15

    AK Steel has managed to bring down its working capital requirements in the first half of the year. This has helped improve its cash flows.

    By Mohit Oberoi, CFA
  • uploads///part
    Earnings Report

    Century Aluminum’s 2Q15 Earnings: Is the Market Overreacting?

    Century Aluminum’s 2Q15 earnings unleashed a selling spree on Wall Street. The company’s share price fell ~40% intraday and finally closed at $5.18.

    By Mohit Oberoi, CFA
  • uploads///nafta
    Earnings Report

    Understanding ArcelorMittal’s 2Q15 NAFTA Performance

    North American Free Trade Agreement (or NAFTA) operations account for almost a quarter of ArcelorMittal’s (MT) revenue.

    By Mohit Oberoi, CFA
  • uploads///combined part
    Earnings Report

    ArcelorMittal Reports Flat Profits in 2Q15: A Challenging Market

    ArcelorMittal’s 2Q15 steel shipments increased 3.4% year-over-year. However, its revenues declined more than 18% over this period.

    By Mohit Oberoi, CFA
  • uploads///eu vehicle sales
    Macroeconomic Analysis

    Alcoa to Benefit as Europe’s Automobile Sales Move in Top Gear

    Europe’s vehicle sales are closely analyzed by aluminum investors. European auto manufacturers are among the earliest adopters of aluminum body vehicles.

    By Mohit Oberoi, CFA
  • uploads///part
    Macroeconomic Analysis

    Alcoa at a 52-Week Low: What Should Investors Do?

    Alcoa was trading at its 52-week low on July 23 and closed at $9.96—breaching the psychologically crucial level of $10 per share for two consecutive days.

    By Mohit Oberoi, CFA
  • uploads///part  steel scrap
    Macroeconomic Analysis

    Nucor, Steel Dynamics to Feel Impact of Rising Steel Scrap Prices

    Steel scrap prices have traded sideways after a steep decline in February. They inched upward in June.

    By Mohit Oberoi, CFA
  • uploads///arch billing index
    Macroeconomic Analysis

    Nucor Could Benefit From Higher Nonresidential Construction Spend

    Nonresidential construction spending has been on an uptrend, increasing 4.5% YoY in the first five months of 2015. This has supported the demand for steel products.

    By Mohit Oberoi, CFA
  • uploads///value chain
    Company & Industry Overviews

    Lower Aluminum Premiums: Good for Fabricators, Bad for Producers

    Aluminum fabricators have benefited from the massive drop in aluminum premiums. Sometimes fabricators face a challenge passing these premiums on to their buyers.

    By Mohit Oberoi, CFA
  • uploads///part  srvice center inventory
    Macroeconomic Analysis

    Why the May Inventory Report Should Bother Steel Investors

    The May inventory report for steel shipments paints a gloomy picture of the steel industry. In May, service center steel shipments fell 12.6% year-over-year.

    By Mohit Oberoi, CFA
  • Basic Materials

    Must-know: Why Nucor is different from its competitors?

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

    By Mohit Oberoi, CFA
  • uploads///part  aluminum prices
    Macroeconomic Analysis

    Aluminum Prices Have a Bad Month: Tank 12% in May

    In May, spot aluminum prices lost 12% of their value. This was the worst monthly performance in the last several years.

    By Mohit Oberoi, CFA
  • uploads///euroe
    Macroeconomic Analysis

    Europe PMI Falls in April as Chinese Demand Slows Down

    The Eurozone’s PMI fell to 51.9 in April, down from 52.2 in March. This recent fall in PMI was the first decline since November.

    By Mohit Oberoi, CFA
  • uploads///Aluminum
    Earnings Report

    Rio Tinto’s 1Q15 Aluminum Production Is Weak, Guidance Maintained

    Rio Tinto’s (RIO) aluminum production in 1Q15 was in line with 1Q14. This is despite a partial shutdown at Kitimat.

    By Anuradha Garg
  • uploads///key segments
    Earnings Report

    Key Investor Takeaways from Nucor’s 1Q15 Earnings

    Nucor reported its 1Q15 earnings on April 23. It posted EPS of $0.21, higher than Nucor’s own guidance. Wall Street was jubilant, sending Nucor shares up more than 2%.

    By Mohit Oberoi, CFA
  • uploads///service center inventory
    Macroeconomic Analysis

    Steel Inventories in US Service Centers Decline Slightly in March

    Metal service centers acquire primary metals like carbon steel and aluminum from metal producers and process them to customer specifications.

    By Mohit Oberoi, CFA
  • uploads///key operations
    Earnings Report

    Key Takeaways from Alcoa’s 1Q 2015 Earnings

    Alcoa (AA) reported its 1Q 2015 earnings on April 8. It reported net income of $195 million on revenues of $5.8 billion.

    By Mohit Oberoi, CFA
  • uploads///steel scrap
    Macroeconomic Analysis

    Steel Scrap Prices Hold Steady after Steep Fall in February

    The falling steel scrap prices will have a mixed impact on companies like Steel Dynamics and Nucor.

    By Mohit Oberoi, CFA
  • uploads///europe indicators
    Earnings Report

    Why a European Recovery Should Affect Alcoa’s 1Q Earnings

    In this part of the series, we’ll discuss how the European recovery should affect Alcoa’s 1Q 2015 earnings.

    By Mohit Oberoi, CFA
  • uploads///europe premiums
    Macroeconomic Analysis

    Aluminum premiums in Europe down as imports surge

    Aluminum premiums in Europe have just seen the biggest three-month fall for the last 17 years.

    By Mohit Oberoi, CFA
  • uploads///low energy prices
    Earnings Report

    Why Did Century Aluminum’s Energy Costs Come Down?

    Prices for fossil fuels came down. This reduced the input costs for power producers. Lower crude oil prices also impact electricity prices.

    By Mohit Oberoi, CFA
  • uploads///century facilities
    Earnings Report

    Understanding Century Aluminum’s Major Operations

    Century Aluminum has an operation in Mt. Holly, South Carolina. It’s the most recent smelter in the US. Recently, Century acquired Alcoa’s stake in this plant.

    By Mohit Oberoi, CFA
  • uploads///net income margin
    Earnings Report

    Century Aluminum’s Profit Margins Rose In 4Q14

    A shift to value-added products also helped enhance Century Aluminum’s profit margins. An increase in its profit margins is a positive sign for its investors.

    By Mohit Oberoi, CFA
  • Basic Materials

    Overview of Reliance Steel & Aluminum Co.

    Reliance Steel & Aluminum Co. (RS) was established in 1939 as a distributor of steel reinforcing bars in California. The company has grown multifold since, both organically and through a focused acquisition strategy.

    By Mohit Oberoi, CFA
  • Basic Materials

    Why has ArcelorMittal been slow on the stock markets?

    While ArcelorMittal is a global leader in steel making, it has lagged its peers when it comes to stock market returns over the past several years—it has underperformed other major steel companies.

    By Mohit Oberoi, CFA
  • Basic Materials

    Must-know: An overview of Nucor Corporation

    Nucor has been a pioneer in technological innovations—it has a history of backing new technologies that others doubted.

    By Mohit Oberoi, CFA
  • uploads///DRI
    Basic Materials

    Why direct reduced iron facilities could be a key driver at Nucor

    Nucor recently started production at its DRI plant in Louisiana.

    By Mohit Oberoi, CFA
  • uploads///divident
    Basic Materials

    Must-know: An investor’s guide to Nucor’s dividend yield

    While other steel companies find their profits and the dividends drop in cyclical downturns, Nucor maintains a healthy dividend yield.

    By Mohit Oberoi, CFA
  • Basic Materials

    Must-know: Nucor’s transformation into a steel company

    Between 2001 and 2010, Nucor adopted a multi-pronged growth strategy.

    By Mohit Oberoi, CFA
  • uploads///timeline
    Basic Materials

    Must-know: The history of US Steel Corporation

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

    By Mohit Oberoi, CFA
  • Basic Materials

    Overview: ArcelorMittal’s major challenges

    This oversupply has been a major factor in stagnant steel prices globally in spite of the increase in demand.

    By Mohit Oberoi, CFA
  • Basic Materials

    Must-know: What strategies have been driving ArcelorMittal?

    Raw material supply remains a key driving factor behind the success of any company in this sector.

    By Mohit Oberoi, CFA
  • uploads///comparison
    Basic Materials

    Must-know: ArcelorMittal’s competitive landscape

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

    By Mohit Oberoi, CFA
  • uploads///leverage
    Basic Materials

    Why leverage in the steel industry is a double-edged sword

    In a nutshell, leverage increases the riskiness of a stock while, at the same time, magnifying returns in a bull market.

    By Mohit Oberoi, CFA
  • Basic Materials

    Must-know: ArcelorMittal’s key segments and markets

    Mining remains the most profitable segment for the company.

    By Mohit Oberoi, CFA
  • uploads///journey
    Basic Materials

    Overview: ArcelorMittal—leader in steel manufacturing

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

    By Mohit Oberoi, CFA
  • uploads///overcapacity
    Basic Materials

    The 2 most important drivers of the global steel trade

    Steel is a global commodity. But its price varies across countries. This price difference leads to international trade. The following factors are important for this trade.

    By Mohit Oberoi, CFA
  • uploads///india
    Basic Materials

    Why India could become the world’s new steel giant

    India is the third-largest consumer of steel. It consumed 79 Mt of steel in 2013. As per Onicra, which is a credit rating agency in India, the country is expected to be the second-largest consumer by 2016.

    By Mohit Oberoi, CFA
  • Basic Materials

    Why steel investors should keep a close eye on central bank policy

    Monetary policy and the resultant interest rates are a key driver for the steel industry. Monetary policy affects the steel industry in several ways.

    By Mohit Oberoi, CFA
  • Basic Materials

    Must-know: Analyzing the way forward for the steel industry

    We’ve seen the historical steel drivers in detail. But in this part of the series, we’ll try to look out for possible factors that could impact the steel industry in the future.

    By Mohit Oberoi, CFA
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