Steelmakers Worthington Industries, Inc. (NYSE:WOR), Metalico Inc. (AMEX:MEA), AK Steel Holding Corporation (NYSE:AKS), ArcelorMittal (NYSE:MT) and Carpenter Technology (NYSE:CRS) are under pressure as costs mount for raw materials and steel demand slows.
A lot of uncertainty surrounds the steel sector as evidenced by the guidance given by the largest steelmaker in the world - ArcelorMittal (NYSE:MT), even after beating estimates for the latest quarter the stock was punished on a weak outlook.
In the short term Arcelor was able to offset higher costs of raw materials by boosting prices, but for the overall steel industry it's questionable as to how high and long they'll be able to do that.
Softer steel prices in North America and Europe point to major challenges going forward for steel companies, as margins will continue to come under pressure.
According to Banco Santander SA, costs of coking coal jumped 68 percent and iron ore 77 percent in the first quarter of 2011.
The steel industry is projected to grow at a 5.9 percent clip this year, says the World Steel Association. Some think that's at the high end of the spectrum.
Pricing will remain a challenge in light of the new pricing system put in place where steelmakers say it's harder to pass on costs to customers because of difficulty in projecting costs.
Expectations are the second half of 2011 will be slow for the industry.
Showing posts with label Carpenter Technology. Show all posts
Showing posts with label Carpenter Technology. Show all posts
Wednesday, May 18, 2011
Steel's (WOR) (MEA) (AKS) (MT) (CRS) Face Uncertainty
Steelmakers Worthington Industries, Inc. (NYSE:WOR), Metalico Inc. (AMEX:MEA), AK Steel Holding Corporation (NYSE:AKS), ArcelorMittal (NYSE:MT) and Carpenter Technology (NYSE:CRS) are under pressure as costs mount for raw materials and steel demand slows.
A lot of uncertainty surrounds the steel sector as evidenced by the guidance given by the largest steelmaker in the world - ArcelorMittal (NYSE:MT), even after beating estimates for the latest quarter the stock was punished on a weak outlook.
In the short term Arcelor was able to offset higher costs of raw materials by boosting prices, but for the overall steel industry it's questionable as to how high and long they'll be able to do that.
Softer steel prices in North America and Europe point to major challenges going forward for steel companies, as margins will continue to come under pressure.
According to Banco Santander SA, costs of coking coal jumped 68 percent and iron ore 77 percent in the first quarter of 2011.
The steel industry is projected to grow at a 5.9 percent clip this year, says the World Steel Association. Some think that's at the high end of the spectrum.
Pricing will remain a challenge in light of the new pricing system put in place where steelmakers say it's harder to pass on costs to customers because of difficulty in projecting costs.
Expectations are the second half of 2011 will be slow for the industry.
ArcelorMittal (NYSE:MT) closed Wednesday at $34.51, plunging $2.25, or 6.12 percent. After hours they continued down, falling to $34.43, down another $0.08, or 0.23 percent.
A lot of uncertainty surrounds the steel sector as evidenced by the guidance given by the largest steelmaker in the world - ArcelorMittal (NYSE:MT), even after beating estimates for the latest quarter the stock was punished on a weak outlook.
In the short term Arcelor was able to offset higher costs of raw materials by boosting prices, but for the overall steel industry it's questionable as to how high and long they'll be able to do that.
Softer steel prices in North America and Europe point to major challenges going forward for steel companies, as margins will continue to come under pressure.
According to Banco Santander SA, costs of coking coal jumped 68 percent and iron ore 77 percent in the first quarter of 2011.
The steel industry is projected to grow at a 5.9 percent clip this year, says the World Steel Association. Some think that's at the high end of the spectrum.
Pricing will remain a challenge in light of the new pricing system put in place where steelmakers say it's harder to pass on costs to customers because of difficulty in projecting costs.
Expectations are the second half of 2011 will be slow for the industry.
ArcelorMittal (NYSE:MT) closed Wednesday at $34.51, plunging $2.25, or 6.12 percent. After hours they continued down, falling to $34.43, down another $0.08, or 0.23 percent.
Monday, May 16, 2011
Outlook for Carpenter (CRS) in the Years Ahead
Carpenter Technology (NYSE:CRS) will no doubt be affected by the proposed slowdown in steel production in China which will also affect imports, as China will start rolling blackouts earlier than usual, which always is directed towards the steel industry in the country in the beginning of the process and onwards.
Tightening of the economy is also a major factor as China continues to attempt to rein in inflation after overstimulating the economy by printing money.
According to the China Iron & Steel Association, the Chinese government is pushing to slow down economic growth, with one of the consequences being the demand for steel slowing down.
Expectations are steel consumption in China will drop by up to 4.6 percent in 2011, with the minimum outlook being a 2.6 percent drop in consumption.
Higher input costs and product prices are weighing heavily on the industry, and it's not clear how much the industry will be able to past on to their customers before they cut back on buying.
Industry observers see the next five year as being challenging for the industry as far as growth goes.
Carpenter Technology Corporation participates in the manufacture, fabrication, and distribution of specialty metals primarily in the North America, Europe, and the Asia Pacific.
Carpenter Technology (CRS) closed Friday at $51.40, falling $0.62, or 1.19 percent.
Tightening of the economy is also a major factor as China continues to attempt to rein in inflation after overstimulating the economy by printing money.
According to the China Iron & Steel Association, the Chinese government is pushing to slow down economic growth, with one of the consequences being the demand for steel slowing down.
Expectations are steel consumption in China will drop by up to 4.6 percent in 2011, with the minimum outlook being a 2.6 percent drop in consumption.
Higher input costs and product prices are weighing heavily on the industry, and it's not clear how much the industry will be able to past on to their customers before they cut back on buying.
Industry observers see the next five year as being challenging for the industry as far as growth goes.
Carpenter Technology Corporation participates in the manufacture, fabrication, and distribution of specialty metals primarily in the North America, Europe, and the Asia Pacific.
Carpenter Technology (CRS) closed Friday at $51.40, falling $0.62, or 1.19 percent.
Thursday, May 5, 2011
Steel's (X) (TS) (SIM) (CMC) (CRS) and China Demand
For the most part, as goes China so goes the demand for steel, and in that regard it doesn't look good for steel companies like Tenaris SA (NYSE:TS), Grupo Simec S.A.B. de C.V. (AMEX:SIM), Commercial Metals Company (NYSE:CMC), US Steel (NYSE:X) and Carpenter Technology (NYSE:CRS), which are going to be pressured in the years ahead from declining demand from the Middle Kingdom.
According to the China Iron & Steel Association, the Chinese government is pushing to slow down economic growth, which will result in demand for steel in the country to slow down.
Estimates under the current scenario for the steel sector have steel consumption declining in China by a minimum of 2.6 percent to as high as 4.6 percent in 2011.
Globally it doesn't look good for the next five years or so either, as the top estimates are for steel demand to grow at a 5 percent rate annually, although many think it'll be less than that.
In the short term, the U.S. steel industry should ship product at 14 percent above 2010 levels, reaching about 95 million tons in 2011.
All the companies are being affected by soaring iron ore prices and other inputs, which are putting stress on margins and earnings because buyers are hesitating to acquire product at too high of prices; something that will continue for several years.
For the steel industry, there isn't much to be optimistic about, no matter how the situation is spun. It's going to remain tough for some time.
US Steel closed Wednesday at $46.80, falling $0.68, or 1.43 percent.
According to the China Iron & Steel Association, the Chinese government is pushing to slow down economic growth, which will result in demand for steel in the country to slow down.
Estimates under the current scenario for the steel sector have steel consumption declining in China by a minimum of 2.6 percent to as high as 4.6 percent in 2011.
Globally it doesn't look good for the next five years or so either, as the top estimates are for steel demand to grow at a 5 percent rate annually, although many think it'll be less than that.
In the short term, the U.S. steel industry should ship product at 14 percent above 2010 levels, reaching about 95 million tons in 2011.
All the companies are being affected by soaring iron ore prices and other inputs, which are putting stress on margins and earnings because buyers are hesitating to acquire product at too high of prices; something that will continue for several years.
For the steel industry, there isn't much to be optimistic about, no matter how the situation is spun. It's going to remain tough for some time.
US Steel closed Wednesday at $46.80, falling $0.68, or 1.43 percent.
Monday, May 2, 2011
Steel Firms (CPSL) (SIM) (ZEUS) (WOR) (CRS) Pressured on Low Growth Outlook
The steel sector, even with some strong recent quarters from companies, looks weak, as over the next five years it is projected to grow at a pace of about 5 percent or less annually, placing downward pressure on steel producers like China Precision Steel, Inc. (Nasdaq:CPSL), Grupo Simec S.A.B. de C.V. (AMEX:SIM), Olympic Steel Inc. (Nasdaq:ZEUS), Worthington Industries, Inc. (NYSE:WOR) and Carpenter Technology (NYSE:CRS). And that's the more positive outlook by most analysts. A large number don't believe growth will even happen at that rate.
A majority of steel companies are being pressured to increase prices on their products in order to protect margins and earnings as the price of inputs and commodities rise.
That's not to say steel demand is falling completely, because it's not. But rising demand in some segments doesn't guarantee rising profits, as the industry is experiencing. A number of weak economies around the world could cut also into demand if steel prices and products rise to prohibitive levels.
There's no way to spin the outlook for the steel industry positively. The industry will struggle for years even in the midst of strong demand in some segments, as they attempt to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.
Olympic Steel closed Friday at $29.37, falling $0.70, or 2.33 percent.
A majority of steel companies are being pressured to increase prices on their products in order to protect margins and earnings as the price of inputs and commodities rise.
That's not to say steel demand is falling completely, because it's not. But rising demand in some segments doesn't guarantee rising profits, as the industry is experiencing. A number of weak economies around the world could cut also into demand if steel prices and products rise to prohibitive levels.
There's no way to spin the outlook for the steel industry positively. The industry will struggle for years even in the midst of strong demand in some segments, as they attempt to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.
Olympic Steel closed Friday at $29.37, falling $0.70, or 2.33 percent.
Friday, April 29, 2011
Nucor (NUE) (WOR) (SUTR) (CRS) (GSI) Pressured on Low Growth Steel Outlook
The steel industry, even with some strong recent quarters, looks weak, as over the next five years it is expected to grow at a pace of about 5 percent or less annually, putting downward pressure on steel producers like Worthington Industries, Inc. (NYSE:WOR), Sutor Technology Group, Ltd. (Nasdaq:SUTR), Carpenter Technology (NYSE:CRS), Nucor (NYSE:NUE) and General Steel Holdings, (NYSE:GSI); although they traded a little stronger Thursday.
A majority of steel companies are being forced to raise prices on their products in order to protect margins and earnings as the price of inputs and commodities rise.
That's not to say steel demand is falling, because it's not. But rising demand doesn't guarantee rising profits, as the industry is experiencing. A number of weak economies around the world could cut also into demand if steel prices and products rise to prohibitive levels.
There's no way to spin the outlook for the steel industry positively.
The industry will struggle for years even in the midst of strong demand, as they attempt to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.
It also looks like the U.S. economy is starting to sputter again, and that's not good news for the steel industry either.
A majority of steel companies are being forced to raise prices on their products in order to protect margins and earnings as the price of inputs and commodities rise.
That's not to say steel demand is falling, because it's not. But rising demand doesn't guarantee rising profits, as the industry is experiencing. A number of weak economies around the world could cut also into demand if steel prices and products rise to prohibitive levels.
There's no way to spin the outlook for the steel industry positively.
The industry will struggle for years even in the midst of strong demand, as they attempt to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.
It also looks like the U.S. economy is starting to sputter again, and that's not good news for the steel industry either.
Wednesday, April 27, 2011
US Steel (X) (TS) (CMC) (CRS) Close Mixed on Cost, Growth Concerns
The steel industry, even with some strong recent quarters, looks weak, as over the next five years it is expected to grow at a pace of about 5 percent or less annually, putting downward pressure on steel producers like Tenaris SA (NYSE:TS), Commercial Metals Company (NYSE:CMC), US Steel (NYSE:X) and Carpenter Technology (NYSE:CRS), which closed mixed on Tuesday. And that's the more positive outlook by the majority of analysts. Many don't think growth will even happen at those modest levels.
A majority of steel companies are being forced to raise prices on their products in order to protect margins and earnings as the price of inputs and commodities rise.
That's not to say steel demand is falling, because it's not. But rising demand doesn't guarantee rising profits, as the industry is experiencing. A number of weak economies around the world could cut also into demand if steel prices and products rise to prohibitive levels.
Of course there a large varieties of companies with steel exposure, and each segment of the sector can represent strengths or weaknesses. So each unit and company will have to be watched closely for performance of course.
There's no way to spin the outlook for the steel industry in a positive manner. The industry will struggle for years even in the midst of strong demand as it attempts to work through the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.
Some winners will emerge, but over time it's not easy to pick any one that's going to stand out. Some have looked to larger companies who may be able to navigate through the higher costs better, but we'll see if that's the case, as it isn't always that simple because of the wide variety of products and costs and pricing power with each one.
A majority of steel companies are being forced to raise prices on their products in order to protect margins and earnings as the price of inputs and commodities rise.
That's not to say steel demand is falling, because it's not. But rising demand doesn't guarantee rising profits, as the industry is experiencing. A number of weak economies around the world could cut also into demand if steel prices and products rise to prohibitive levels.
Of course there a large varieties of companies with steel exposure, and each segment of the sector can represent strengths or weaknesses. So each unit and company will have to be watched closely for performance of course.
There's no way to spin the outlook for the steel industry in a positive manner. The industry will struggle for years even in the midst of strong demand as it attempts to work through the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.
Some winners will emerge, but over time it's not easy to pick any one that's going to stand out. Some have looked to larger companies who may be able to navigate through the higher costs better, but we'll see if that's the case, as it isn't always that simple because of the wide variety of products and costs and pricing power with each one.
Monday, April 25, 2011
US Steel (X) (SUTR) (WOR) (CRS) Pressured on Low Growth Outlook
The steel industry, even with some strong recent quarters, looks weak, as over the next five years it is expected to grow at a pace of about 5 percent or less annually, putting downward pressure on steel producers like Sutor Technology Group, Ltd. (Nasdaq:SUTR), Worthington Industries, Inc. (NYSE:WOR), US Steel (NYSE:X) and Carpenter Technology (NYSE:CRS), even with a couple of decent quarterly results coming from their peers, like Steel Dynamics (NASDAQ:STLD). And that's the more positive outlook by the majority of analysts. Many don't think growth will happen even at that rate.
A majority of steel companies are being pressured to raise prices on their products in order to protect margins and earnings as the price of inputs and commodities jump.
That's not to say steel demand is falling, because it's not. But the slowly rising demand doesn't guarantee rising profits, as the industry is experiencing at this time. A number of weak economies around the world could also cut into demand if steel prices and products rise to prohibitive levels.
There's no way to spin the outlook for the steel industry in a positive manner. The industry will struggle for years, even in the midst of better demand, as it attempts to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from the producers.
Sutor Technology Group, Ltd. closed Thursday at $1.52, gaining $0.02, or 1.33 percent. Worthington Industries, Inc. ended the session at $20.98, falling $0.02, or 0.10 percent. Carpenter Technology closed at $44.90, up $0.85, or 1.93 percent. US Steel Company closed at $51.73, dropping $1.02, or 1.93 percent.
A majority of steel companies are being pressured to raise prices on their products in order to protect margins and earnings as the price of inputs and commodities jump.
That's not to say steel demand is falling, because it's not. But the slowly rising demand doesn't guarantee rising profits, as the industry is experiencing at this time. A number of weak economies around the world could also cut into demand if steel prices and products rise to prohibitive levels.
There's no way to spin the outlook for the steel industry in a positive manner. The industry will struggle for years, even in the midst of better demand, as it attempts to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from the producers.
Sutor Technology Group, Ltd. closed Thursday at $1.52, gaining $0.02, or 1.33 percent. Worthington Industries, Inc. ended the session at $20.98, falling $0.02, or 0.10 percent. Carpenter Technology closed at $44.90, up $0.85, or 1.93 percent. US Steel Company closed at $51.73, dropping $1.02, or 1.93 percent.
Thursday, April 21, 2011
Steel Companies POSCO (PKX) (MT) (CRS) (SCHN) Get Boost from Consumption Report, (STLD)
Investors have suddenly become steel industry and company believers after the performance of Steel Dynamics, Inc. (Nasdaq:STLD) and the release of estimates for glow steel production by the World Steel Association, which pushed up the share price of ArcelorMittal (NYSE:MT), Carpenter Technology (NYSE:CRS), Schnitzer Steel Industries (NASDAQ:SCHN) and POSCO (NYSE:PKX) Wednesday.
Steel Dynamics gave as its reason for the optimism as growing backlogs in the company’s structural and rail division, but quietly added some of that could have been weather-related.
Also the projected global steel consumption growth of 5.9 percent didn't included the potential devastating effect the slowdown in Japan will have, as it's the largest consumer of steel in the world. Without that, the numbers are pretty meaningless. And it will take time, as with everything related to Japan at this time, before we know the full impact on steel and other sectors.
POSCO closed Wednesday at $113.23, gaining $2.73, or 2.47 percent. Schnitzer Steel Industries ended the day at $60.55, up $0.94, or 1.58 percent. Carpenter Technology closed at $44.05, jumping $0.85, or 1.97 percent. ArcelorMittal closed the session at $36.11, rising $1.15, or 3.29 percent.
Steel Dynamics gave as its reason for the optimism as growing backlogs in the company’s structural and rail division, but quietly added some of that could have been weather-related.
Also the projected global steel consumption growth of 5.9 percent didn't included the potential devastating effect the slowdown in Japan will have, as it's the largest consumer of steel in the world. Without that, the numbers are pretty meaningless. And it will take time, as with everything related to Japan at this time, before we know the full impact on steel and other sectors.
POSCO closed Wednesday at $113.23, gaining $2.73, or 2.47 percent. Schnitzer Steel Industries ended the day at $60.55, up $0.94, or 1.58 percent. Carpenter Technology closed at $44.05, jumping $0.85, or 1.97 percent. ArcelorMittal closed the session at $36.11, rising $1.15, or 3.29 percent.
Wednesday, April 20, 2011
Steel Firms Gerdau (GGB) (SCHN) (AKS) (CRS) Jump on Steel Dynamics' Strength
Even though the results of Steel Dynamics (NASDAQ:STLD) gave steel stocks like Carpenter Technology (NYSE:CRS), Gerdau S.A. (NYSE:GGB), Schnitzer Steel Industries (NASDAQ:SCHN) and AK Steel Holding Corporation (NYSE:AKS) a big boost Tuesday, overall, the steel industry looks weak over the next five years, as it is expected to grow at a pace of 5 percent or less annually, putting downward pressure on steel producers like. And that's the more optimistic outlook by analysts. Most don't think growth will be at that rate.
Most steel companies are being forced to raise prices on their products in order to protect margins and earnings, as the price of inputs and commodities rise.
That's not to say steel demand is dropping, because it's not. But rising demand doesn't guarantee rising profits, as the industry is finding out. Weak economies around the world could cut into demand if steel prices and products rise to prohibitive levels.
There's no way to spin this in a positive manner. The industry will struggle for years even in the midst of strong demand, as they attempt to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.
As for Steel Dynamics, it admits bad weather in February could have been the reason for the jump in March shipments. Even if steel companies in general have a good quarter to report, it's very doubtful it has changed the outlook over the next several years. It could be a chance to make some quick money though.
Steel Dynamics (NASDAQ:STLD) closed at $18.46, gaining $1.00, or 5.73 percent. AK Steel Holding Corporation closed at $16.08, rising $0.69, or 4.48 percent. Schnitzer Steel Industries closed at $59.61, jumping $0.99, or 1.69 percent. Gerdau S.A. ended the session at $11.82, increasing $0.06, or 0.51 percent. Carpenter Technology closed at $43.20, gaining $1.72, or 4.15 percent.
Most steel companies are being forced to raise prices on their products in order to protect margins and earnings, as the price of inputs and commodities rise.
That's not to say steel demand is dropping, because it's not. But rising demand doesn't guarantee rising profits, as the industry is finding out. Weak economies around the world could cut into demand if steel prices and products rise to prohibitive levels.
There's no way to spin this in a positive manner. The industry will struggle for years even in the midst of strong demand, as they attempt to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.
As for Steel Dynamics, it admits bad weather in February could have been the reason for the jump in March shipments. Even if steel companies in general have a good quarter to report, it's very doubtful it has changed the outlook over the next several years. It could be a chance to make some quick money though.
Steel Dynamics (NASDAQ:STLD) closed at $18.46, gaining $1.00, or 5.73 percent. AK Steel Holding Corporation closed at $16.08, rising $0.69, or 4.48 percent. Schnitzer Steel Industries closed at $59.61, jumping $0.99, or 1.69 percent. Gerdau S.A. ended the session at $11.82, increasing $0.06, or 0.51 percent. Carpenter Technology closed at $43.20, gaining $1.72, or 4.15 percent.
Wednesday, April 13, 2011
POSCO (PKX) (WOR) (CRS) (GSI) Drop as Commodities Correct
A general correction in commodities prices as a result of the plunge in oil prices pressured the steel sector, with POSCO (NYSE:PKX), Worthington Industries, Inc. (NYSE:WOR), Carpenter Technology (NYSE:CRS) and General Steel Holdings, (NYSE:GSI) all closing down Tuesday.
Crude oil prices for May delivery were down as much as 63 cents, or 0.6 percent, to $105.62 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $106.01 at 10:14 a.m. Sydney time. Yesterday, it dropped $3.67 to $106.25. Prices fell 5.9 percent on April 11 and 12.
The U.S. raised its crude-oil price estimate for 2011 to an average $106.38 a barrel from $101.77 in March, according to the Energy Department’s Short-Term Energy Outlook.
General Steel Holdings closed Tuesday at $2.08, falling $0.18, or 7.96 percent. Carpenter Technology closed at $40.69, down $0.29, or 0.71 percent. Worthington Industries, Inc. closed at $20.19, dropping $0.27, or 1.32 percent. POSCO ended the session at $109.51, declining $0.91, or 0.82 percent.
Crude oil prices for May delivery were down as much as 63 cents, or 0.6 percent, to $105.62 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $106.01 at 10:14 a.m. Sydney time. Yesterday, it dropped $3.67 to $106.25. Prices fell 5.9 percent on April 11 and 12.
The U.S. raised its crude-oil price estimate for 2011 to an average $106.38 a barrel from $101.77 in March, according to the Energy Department’s Short-Term Energy Outlook.
General Steel Holdings closed Tuesday at $2.08, falling $0.18, or 7.96 percent. Carpenter Technology closed at $40.69, down $0.29, or 0.71 percent. Worthington Industries, Inc. closed at $20.19, dropping $0.27, or 1.32 percent. POSCO ended the session at $109.51, declining $0.91, or 0.82 percent.
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