UPDATE: Morgan Stanley Decreases PT on Schnitzer Steel to $28

According to a research report this morning, Morgan Stanley decreases its PT on Schnitzer Steel SCHN from $50 to $28 following a sudden growth in the scrap supply in China. Morgan Stanley stated, “China in particular is set to see an uptick in obsolete scrap supply growth. We estimate a 5-year CAGR of 14%, which compares to a 7% growth rate in scrap demand. We think Asian scrap prices could fall, pressuring Schnitzer's ability to profit by buying scrap cheaply in the US and exporting it to Asia.” Schnitzer Steel closed Friday at $25.68 as Morgan Stanley maintains its Underweight rating.