As goes China so goes the demand for steel, and in that regard it doesn't look good for steel companies like Ternium S.A. (NYSE:TX), Synalloy Corp. (Nasdaq:SYNL), Gibraltar Industries, Inc. (Nasdaq:ROCK), China Gerui Advanced Materials (Nasdaq:CHOP) and Steel Dynamics (NASDAQ:STLD), 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.
Steel Dynamics closed Wednesday at $17.36, falling $0.41, or 2.31 percent.
Showing posts with label China Gerui Advanced Materials. Show all posts
Showing posts with label China Gerui Advanced Materials. Show all posts
Thursday, May 5, 2011
Monday, May 2, 2011
Steel Firms (NUE) (CHOP) (SID) (ROCK) (GNI) 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 Nucor (NYSE:NUE), China Gerui Advanced Materials (Nasdaq:CHOP), Companhia Siderurgica Nacional (NYSE:SID), Gibraltar Industries, Inc. (Nasdaq:ROCK) and Great Northern Iron Ore Proper (NYSE:GNI). 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.
Nucor closed Friday at $46.96, gaining $0.47, or 1.01 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.
Nucor closed Friday at $46.96, gaining $0.47, or 1.01 percent.
Thursday, April 28, 2011
POSCO (PKX) (HSC) (FRD) (CHOP) (MT) 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 Harsco Corporation (NYSE:HSC), Friedman Industries Inc. AMEX:FRD), China Gerui Advanced Materials (Nasdaq:CHOP), POSCO (NYSE:PKX) and ArcelorMittal (NYSE:MT); 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
Insteel (IIIN) (CHOP) (NUE) (MT) 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 Insteel Industries Inc. (Nasdaq:IIIN), China Gerui Advanced Materials (Nasdaq:CHOP), Nucor (NYSE:NUE) and ArcelorMittal (NYSE:MT), 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
Harsco (HSC) (GSI) (CHOP) (SCHN) 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 General Steel Holdings, (NYSE:GSI), China Gerui Advanced Materials (Nasdaq:CHOP), Schnitzer Steel Industries (NASDAQ:SCHN) and Harsco Corporation (NYSE:HSC), 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.
Harsco Corporation closed Thursday at $34.41, gaining $0.44, or 1.30 percent. Schnitzer Steel Industries ended the session at $60.67, falling $0.02, or 0.10 percent. China Gerui Advanced Materials closed at $4.81, up $0.85, or 1.93 percent. General Steel Holdings closed at $2.12, level with its prior close.
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.
Harsco Corporation closed Thursday at $34.41, gaining $0.44, or 1.30 percent. Schnitzer Steel Industries ended the session at $60.67, falling $0.02, or 0.10 percent. China Gerui Advanced Materials closed at $4.81, up $0.85, or 1.93 percent. General Steel Holdings closed at $2.12, level with its prior close.
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