The pressure on steel companies like United States Steel Corp. (NYSE:X), A.K. Steel Holding Corp. (NYSE:AKS), Nucor Corp. (NYSE:NUE) and Reliance Steel and Aluminum (NYSE:RS) should be just that, as the sector retreated after finishing off a strong first quarter.
Bridget Freas, a Morningstar Inc. market analyst covering the steel and aluminum sector, said, “They had a run-up in share prices in the last couple of days, so what we’re seeing now is most likely just a correction.”
Most analysts seeing the overall industry doing well as they approach earnings season.
Strong demand and the resultant ability to charge higher prices have driven the steel companies up recently, which should continue on, especially as Japan starts to rebuild.
Taking into account U.S. Steels fixed cost structure, along with higher steel prices, suggests they could reveal a good quarter when they report.
U.S. Steel closed Thursday at $53.94, falling $2.37, or 4.21 percent. AK Steel closed at $15.78, dropping $0.50, or 3.07 percent.
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