Bank of America Positive on US Steel Sector
Bank of America has published a research report on the US Steel Sector after reports show that December distribution shipments have fallen.
In the report, Bank of America writes, "Dec steel shipments fell 14.7% daily compared with a historical 12.7% m/m decline. Flat-rolled and plate shipments fell the most of the carbon products, down 16.6% and 13.4% respectively on a days-adj basis m/m. Tubular shipments fell the least, down 7.7% m/m. Stainless steel shipments fell 15.8% m/m but were up 4.6% y/y. Weak stainless demand has been an overhang on U.S. producers ATI and AKS but we anticipate restocking in 2012 given the low I/S ratio. Meanwhile, aluminum shipments fell 13.8% m/m on a days-adj basis but were up 13.1% y/y. Steel market mixed signals have confused investors as the Sparrows Point mill idled and is restarting and scrap rose then retreated again. However, we still expect the group to outperform near term as we think investor expectations are too low and upcoming Q1 outlooks should be quite positive. Sparrows should take time to restart, and scrap is just correcting to a still elevated level given the mild winter. Any weather-related disruption or Chinese rebound after its easing could further strengthen the steel thesis."
Companies related to this report include:
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