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Analyzing Recent Developments in the Steel Industry (Part 7 of 9) (Continued from Part 6) US steel consumption
In its short range outlook report, released on April 20, the WSA (World Steel Association) expects US steel consumption to drop 0.4% this year on a YoY (year-over-year) basis. Last year, US steel consumption increased by an impressive 11.7%. The outlook for the US steel industry got worse in the last few months. Companies, like AK Steel (AKS), get a major part of their revenue from the US markets.
Production down
Until last year, US steel companies faced a challenge in cheap imports from countries like China and Korea. Apparently, Korea (EWY) emerged as the biggest steel exporter to the US. The threat from steel imports persists this year as well. However, now steel companies are faced with a demand slowdown as well. US Steel production dropped substantially this year. This can be seen in the above chart.
Energy sector
Steel Dynamics (STLD) reported its 1Q15 financial results on April 20. It reported a sequential drop in steel shipments. The slowdown in US steel consumption is largely led by the energy sector. The energy sector accounts for 10% of steel consumption. It saw its fortunes turn upside down as crude oil prices plummeted to multiyear lows.
The oil rig count is down by more than half since October 2014. Steel demand from energy companies has been subdued this year. Almost 10% of Nucor’s (NUE) shipments are to the energy sector. Tenaris (TS) is another major supplier to energy companies. These companies have been hit negatively by the steep fall in crude oil prices.
The US housing sector also showed signs of weakness over the last couple of months. We’ll discuss this in more detail in the next part of this series.
Continue to Part 8 Browse this series on Market Realist:
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United States Steel Corporation
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CODE : X |
ISIN : US9129091081 |
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United States Steel est une société de production minière de fer et de étain basée aux Etats-Unis D'Amerique. United States Steel est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 6,4 milliards US$ (5,7 milliards €). La valeur de son action a atteint son plus bas niveau récent le 28 mars 2003 à 10,01 US$, et son plus haut niveau récent le 30 novembre 2007 à 98,85 US$. United States Steel possède 176 184 431 actions en circulation. |