Watch Out U.S. Steel, You Might Be Next (AKS, STLD, X)

AK Steel AKS, Steel Dynamics STLD and Nucor NUE all recently lowered their earnings expectations for the third quarter, due to higher input costs, lower sales prices, and a blast furnace outage at AK's Ashland furnace. How does this look for U.S. Steel X and its shareholders? It's a mix at this point, with more negative points than good at this time. One positive for U.S. Steel the higher input costs, as X owns their own iron ore plants, a significant cost of making steel. AK and Steel Dynamics do not, and thus have less control over their input costs than U.S. Steel does. That's about it for the positives. The negatives seem to far outweigh the lone positive at this point, with slowdowns in construction spending, lower sales prices among the reasons to blame. Another negative is the price of scrap metal, which has been rising as the automobile industry slowed down over the summer months, easing the oversupply of scrap metal, and thus causing the price to rise. In a statement released yesterday, Nucor said, "Our third-quarter results will unfortunately confirm these concerns and a general slowdown has indeed occurred from the second quarter, particularly in our flat-rolled business." I would expect U.S. Steel to echo the same sentiments of its competitors, and lower its earnings outlook for the third quarter. Shares of X have fallen in recent days on the lowered outlooks from its competitors, so shares may not fall too much further. Since the beginning of the week, shares have fallen approximately 4%, about in line with its competitors on the weakened outlook. Investors and traders should be aware that the next shoe is about to drop, and X marks the spot this time. Disclosure: long X See more real-time trading ideas Here