I'm here in part to substantiate a remark made to you last week by my capable Motley Fool colleague Christopher Barker: The bottom of the U.S. steel market has been spied.
Accompanying an earnings report by Nucor
My own confident assessment comes from none other than U.S. Steel
Nevertheless, the sun didn't shine uniformly at U.S. Steel during the period. Of the company's three operations, the loss from the flat-rolled unit shrank from the prior quarter, even with the utilization rate remaining at a paltry 32%. In fact, while CEO John Surma predicted another round of losses for the next quarter, there are enough positive signs in the flat-rolled area, for instance -- which serves automotive and appliance manufacturers, among others -- that the company plans to reopen its shuttered flat-rolled plant in Granite City, Illinois.
At the same time, U.S. Steel Europe may be on the mend. For a number of reasons, including lower raw material costs, the unit "improved significantly" over the results of the first quarter of 2009.
The laggard, however, was the tubular goods area, which primarily serves the energy industry. According to U.S. Steel, the unit's continuing softness reflects "the impacts of lower oil and gas exploration and production activity, high inventory levels and the surge of unfairly traded and subsidized product from China."
But two for three is good in both baseball and steel industry recovery. If you like what you're hearing from U.S. Steel and Nucor, it just might be time to get yourself into the game.
For related Foolishness:
- U.S. Steel: Under-Stimulated Steel
- China's Timely Iron Ore Discovery
- Nucor Primed to Roll the Competition
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