Shares of steel companies rose Thursday as price hikes for certain products surprised investors who had thought that such prices had reached a top.
CIBC World Markets analyst Michael Willemse said North American steel prices last month for rebar (reinforcement bar), merchant bar and wire rod were higher than anticipated.
"We continue to believe that hot rolled sheet prices have peaked (for the current cycle) at approximately $1,060/ton; however, it appears that the peak in rod and bar prices was higher than our previous assumptions," he wrote Wednesday in a client note.
He also increased his earnings estimates for Commercial Metals Co., Gerdau Ameristeel and Nucor Corp.
KeyBanc analyst Mark L. Parr, who recently concluded a tour of Steel Dynamics Inc. facilities, said global pricing power remains strong.
"We reiterate our 'Buy' rating on the stock based on excellent operational execution, success with outpacing input cost increases (enhanced by OmniSource), solid domestic market positioning in flat-rolled and beam, and robust global pricing in metals recycling," he wrote Thursday.
Shares of Nucor rose $1.43, or 2 percent, to $75.78, and Commercial Metals rose 4 cents to $36.04.
Gerdau Ameristeel rose 8 cents to $18.09; General Steel Holdings Inc. rose 14 cents to $9.14; Steel Dynamics rose $1.03, or 2.8 percent, to 38.10; Cleveland-Cliffs Inc. rose $3.44, or 3.6 percent, to $99.16; and Schnitzer Steel Industries Inc. rose $2.14, or 2.2 percent, to $98.64.
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