For Immediate Release
Chicago, IL – March 11, 2010 – Zacks.com announces the latest Industry Outlook. Today, Zacks Equity Research discusses the Steel Industry, including U.S. Steel Corp. (X), Nucor Corporation (NUE), AK Steel (AKS) and Steel Dynamics Inc. (STLD).
A synopsis of today’s Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/31492/Steel+Industry+Stock+Review+-+March+2010.
Domestic sheet steel prices have continued their upward trajectory. Relative domestic prices for most steel products increased in February, with the notable exception of beams. U.S. rebar prices are up 11% from January and have posted increases relative to China and Europe where prices have slid modestly lower, and versus Japan where prices are up 8% after falling 6% the month before. Domestic plate prices rose another 7% in February and are up relative to China and Europe where prices are flat.
With steel demand and prices picking up in the last couple of months, steel producers are restarting facilities. Recently, U.S. Steel Corp. (X) — the eighth largest steel producer in the world, the largest integrated steel producer headquartered in North America and one of the largest integrated flat-rolled producers in Central Europe — has restarted its blast furnace at its Hamilton, Ontario plant after a nine-month shutdown.
In response to increased customer order rates, U.S. Steel operated all of its North American blast furnaces in 2009 except the one at Gary Works and the other at its Lake Erie Works due to labor issues. U.S. Steel has also restarted its Keetac iron ore operations.
The current surge in steel demand helped profits of Nucor Corporation (NUE), the largest recycler of steel scrap in the U.S. Nucor returned to profitability in the fourth quarter of 2009 with net earnings of $58.9 million or 18 cents per share, ahead of the Zacks Consensus Estimate.
Overall steel mill utilization increased to 58% from 48% in last year’s comparable quarter. Steel mill utilization rates decreased from 80% in 2008 to 54% in 2009. Long-term contracts, cost reduction efforts and a dominant acquisition strategy inspire optimism about the company’s performance in the coming quarters.
Similarly, commercial metals company AK Steel (AKS) reported earnings of $39.8 million or 36 cents per share in the fourth quarter in contrast to a net loss of $430.6 million or $3.87 per share in the fourth quarter of 2008, driven by higher shipments.
The third largest steel maker in the U.S., Steel Dynamics Inc. (STLD), reported a net income of $26.7 million or 12 cents per share in the last quarter of 2009, after reporting losses in the first two quarters of the year. Earnings were driven by fixed cost reduction through higher production and shipping volumes at the Flat-rolled segment and better-than-expected performance in the Metals Recycling segment.
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