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Briefing.com's comments on Steel |
HenryTo
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Joined: 06 Aug 2004
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Location: Los Angeles, California
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 Posted: Thu Jun 09, 2005 5:12 pm Post subject: Briefing.com's comments on Steel |
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Comments on Steel - just posted on Briefing.com
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4:27PM Mittal Steel's cautious comments could affect other steel producers (MT) :Mittal Steel's decision to lengthen its blast furnace outage with accompanying layoffs at its Weirton facility could impact other steel producers/suppliers. While it's good news for producers that some capacity is being taken out of the market, the co's comments that market conditions have not improved could weigh on the sector. Watch for impact on other integrated producers (AKS, WPSC, X), as well as mini-mills (IPS, NUE, OS, STLD). Could also be seen as a negative for iron ore producers which supply blast furnaces for the integrated producers: CLF, RIO. |
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Briefing.com's comments on Steel Replies |
HenryTo
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Joined: 06 Aug 2004
Posts: 11723
Location: Los Angeles, California
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| Posted: Thu May 10, 2012 5:25 pm Post subject: |
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Morningstar on MT's 1Q earnings. Interestingly, the company sees steel demand picking up in Europe.
| Quote: | | ArcelorMittal MT gave some reassurance to investors in its first-quarter earnings release, saying that it is not seeing a crisis type of environment in Europe, with lower risks than the company faced six months ago, and North America is trending better than the company had expected. First-quarter EBITDA of $2 billion came in ahead of consensus estimates, which had expected results in line with the fourth quarter's EBITDA of $1.7 billion. This is still relatively weak compared with how the company has performed in the past of couple years, but we think the market has priced in too much downside risk. We are encouraged that margins appear to have stabilized, and guidance suggests higher profitability in all five steel segments in the second quarter, reducing the likelihood that the company will require additional capital this year. Steel shipments increased 7.8% sequentially and 1.2% from the year-ago quarter while iron ore production was up 12.1% from a year ago, although down from the fourth quarter. Mining was one key area that saw a sequential EBITDA decline due to lower shipments and lower iron ore prices. Spot iron ore prices stumbled last October on reduced consumption from China, and while they have retraced some of the decline, we don't think there is much upside to iron ore prices from current levels. The mining segment still posted an impressive EBITDA margin of 38%; longer term, we expect this to decline to around 30%. This weakness will be more than offset by cost relief in the steel segments, however, as iron ore is the largest input cost. Management affirmed its prior guidance for first-half EBITDA higher than the year-ago period, which implies second-quarter EBITDA of $2.15 billion. While shipments are likely to be unchanged, steel prices are starting to pick up and lower input costs should provide some margin expansion. We think the company is on track to achieve our full-year EBITDA forecast of $9.6 billion, as we expect the latter half of the year to see further moderation of input costs, continued slow improvement in steel shipments, higher iron ore and coal production, and greater realization of asset optimization benefits, keeping margins roughly in line with 2011. It will still take another two years before we see a full recovery in profitability to levels we think are more representative of the company's long-term earnings power, but fundamentals in Europe appear to be past the bottom, and we think the downside risk is limited. |
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nodoodahs
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Joined: 06 May 2005
Posts: 2408
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| Posted: Thu Jun 09, 2005 6:35 pm Post subject: Good buying opportunity? |
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NUE is already a good value. If this market depresses the price, it'll be a good buying opportunity.
I may pick up some more! 
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