TimkenSteel Corp

The current year has been a dismal year for U.S. Steel’s Tubular segment, which generated a negative per ton EBITDA of $533 and $234 in 2Q15 and 3Q15, respectively.

In November 2015, the United States imported 2.1 million metric tons of steel products—a YoY decline of 36%. What’s more, in November, US steel imports fell to a four-year low.

Steel executives have been regularly blaming the steep rise in US steel imports as the main reason for their woes. Last year, three companies presented their cases before members of Congress.

Lower leverage ratios give Worthington a lot of opportunities to expand its business. The company’s cash flow is also in good shape.

If China doesn’t cut its aluminum smelting capacity meaningfully, aluminum might suffer the same fate as steel. US steel companies have been reeling under the impact of steel imports for quite some time.

In 4Q14, Bridgewater Associates started a position in US Steel Corporation (X). X accounted for 0.12% of the fund’s total fourth-quarter portfolio.

ArcelorMittal is planning to “structurally improve” its EBITDA by $1 billion in 2016. It expects to realize one-third of these improvements in 1H16.

A sustained recovery in the EU housing market should boost the European steel industry. However, the housing industry has been giving mixed signals.

Out of the nine analysts covering Cleveland-Cliffs (CLF) stock, 55.6% rate it as a “hold.”

On a relative basis, Cliffs Natural Resources (CLF) has outperformed other iron ore miners by a wide margin. It had a YTD rise of 182% as of April 19, 2016.

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

US steel imports have been falling gradually since the beginning of 2015. The downtrend continued in January 2016, when US steel imports fell more than 41% YoY.

China plans to curtail its excess steel capacity. However, even if China actually cuts the excess steel capacity, it could be in a very gradual way.

An encouraging development in AK Steel’s 3Q15 financial performance was strong EBITDA of $120 million. This is the highest quarterly EBITDA in more than six years.

Looking at steel demand indicators, we see that construction activity has generally been strong in 2015, with spending in the United States exceeding $1 trillion for seven consecutive months.

If you’re an investor in any of the steel companies (XME), you should explore how the Chinese (FXI) steel demand is playing out.

The steel industry was banking on a possible 2H15 recovery. However, the operating environment has become even more challenging.

US steel imports have now fallen on a yearly basis for four consecutive months.

May construction spending data, released on June 1, came in at a SAAR of $1.04 trillion. This is the second straight month where construction spending has passed $1 trillion SAAR.

The decline in the real estate climate index is another indication that construction activity has slowed down in China.

Steel is Worthington Industries’ biggest segment, accounting for more than half of the company’s operating profits.

A massive increase in steel imports has been the single biggest risk for the US steel industry. U.S. Steel faces challenges in its tubular segment also.

Property prices have also been weak in China. New home prices have fallen in 66 out of 70 top Chinese cities and in January, prices had fallen in 64 cities.

U.S. Steel has an iconic past, but it has lost a lot of its sheen in the last few years. However, it’s working on a transformation program.

A low capacity utilization rate increases competition between existing industry players. This pressures steel prices as producers try to increase sales.