Gold has dominated the conversation in the metals sector for weeks as the threat of a Greek default and consequently, anxiety over a tumbling Euro has gold bugs attacking in droves. Recently though, another metal has come into the spotlight, one significantly more utilitarian than its shinier counterpart. Steel stocks were up today alongside predictions that the U.S. should see a growing demand for steel alongside natural population influx, infrastructural benefits and the availability of the mtal. OAO Severstal, the Russian steelmaker made bullish claims today, debunking the notion that in its steel industry will endure prolonged suffering as a consequence of lower hiring and manufacturing.
Rather, Severstal executives claimthat the easy access to steelmaking materials such iron ore and coking coal, and continue population growth make for an optimistic outlook for steel and that trend is beginning.
Speaking at the Steel Success Strategies conference, hosted by American Metal Market and World Steel Dynamics, Chief Executive Alexei Mordashov expressed the need to double demand at the companies Mississippi plant in order to adequately serve the demand for steel coming from the American auto industry and pipe consumers. The demand is largely coming from the south, an area that the company plans to continue to explore.
Sergei Kuznetsow, chief Executive of the companies Norther American Unite said he believes demand for flat-rolled steel products will grow by 4 percent annually for the next five to six years.
Whether or not he’s right, it seems that investors are on the steel train. Every single company listed under Iron and Steel on U.S. indexes was up today.
According to the American Iron and Steel Institute on Tuesday, U.S. preliminary steel imports rose 6 percent to 2.69 million short tons in May compared with April. Alternately, finish steel imports, a subset of total imports estimated to be around 21 percent, declined five percent to 1.84 million tons, according to preliminary Census Bureau Data provided by AISI.
U.S. steel shipments for the first four months of 2011 are higher by 7.8 percent at 29.76 million tons compared with the year-earlier period.
POSCO (PKX) rose considerably on the news, as well as an official of the companies comment that of land for a steel plant was delayed only temporarily as a consequence of the weather and protests by villagers against the factory's construction.
Haynes (HAYN), which develops manufactures markets and distributed high-performance nickel and cobalt based alloys, has also been moving higher. The company recently joined the S&P 600, taking the place of Volcom.
Commercial Metals Co. (CMC) was also notably higher after rebounding from a year-earlier third-quarter loss resultant of falling scrap metal prices that negatively impacted inventory-related charges. All but one of company's business segments were profitable.
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