Steel Stocks Rusty After Schnitzer Steel Guidance

Steel stock have been under heavy pressure today after Schnitzer Steel Industries

announced a disappointing first quarter guidance this morning. The company reported Q1 prelim EPS of $0.18-0.25 versus $0.55 estimate. As a result, the stock is currently trading 9% lower than Friday's closing price. The company also announced that its Metals Recycling Business, operating income per ferrous ton is expected to be approximately 50% lower than the $21 per ton recorded in the first quarter of fiscal 2011. In our Auto Parts Business, operating income is expected to be approximately 30% lower than recorded in the first quarter of fiscal 2011. Schnitzer Steel's cautious guidance sent its competitors' shares lower as well. United States Steel Corporation

is currently trading nearly 6% lower, Mechel

is down nearly 9%, and Cliffs Natural Resources

is down over 5%.