Skip to main content

Market Overview

Analyst Sees Steel-Dumping Case On Horizon, Launches Sector Coverage

Share:

U.S. steel producers are likely to file dumping charges against China following the release of their first-quarter results, an analyst said Monday.

"But it's often a regulatory 'whack-a-mole' game," Clarkson Capital's Lee McMillan said. "Cheap steel is notoriously difficult to keep out of the country."

Despite his expectation of continued low steel prices, McMillan launched coverage on eight steel makers Monday with no less than four Buy ratings.

Key to picking winners: exposure to the U.S. automotive and construction industries.

Citing those factors, McMillan offered Buy recommendations on ArcelorMittal SA (ADR) (NYSE: MT), AK Steel Holding Corporation (NYSE: AKS) Nucor Corp. (NYSE: NUE) and Tata Steel Ltd.

Steel makers that rely on the oil and gas industry, which typically accounts for 10 percent of U.S. steel demand, are likely to be in a rut for awhile, McMillan said.

Rating a Sell: United States Steel Corporation (NYSE: X) for its high fixed costs and reliance on the U.S. energy sector.

McMillan is on the fence mostly over valuation with Hold ratings on Commercial Metals Company (NYSE: CMC), Reliance Steel & Aluminum (NYSE: RS) and Steel Dynamics, Inc. (NASDAQ: STLD).

With Chinese Steel consumption down more than 7 percent in the first two months of 2015, McMillan said imports will continue to depress U.S. steel prices.

China produces about half the world's steel and consumes about 48 percent. Much of its remainder ends up on the U.S. market.

Latest Ratings for MT

DateFirmActionFromTo
Mar 2021KeyBancMaintainsOverweight
Jan 2021JP MorganUpgradesNeutralOverweight
Jan 2021KeyBancMaintainsOverweight

View More Analyst Ratings for MT
View the Latest Analyst Ratings

 

Related Articles (AKS + MT)

View Comments and Join the Discussion!

Posted-In: Clarkson Capital Lee McMillan SteelAnalyst Color Initiation Analyst Ratings Trading Ideas

Latest Ratings

StockFirmActionPT
ENTGUBSInitiates Coverage On120.0
RBAOTR GlobalDowngrades
TTDVertical ResearchUpgrades
ZGBTIGMaintains202.0
DCredit SuisseMaintains90.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com