TimkenSteel Corp

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.

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.

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.

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.

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.

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.