The U.S. steel industry is ablaze this month in a cauldron of molten whispers about purported takeovers. Meanwhile, the pace of noteworthy developments that are verifiable has quickened faster than Rosie the Riveter on a wartime assembly line.
New mitts for Nucor
One could feel the excitement start to build last week when Nucor
Perhaps of even greater interest to Nucor shareholders, however, is the improved facility (provided by this relationship with Mitsui) for strategic investment exposure within foreign steel markets that are less structurally impaired than those closer to home.
Dynamic days for Steel Dynamics
Fellow scrappy steelmaker Steel Dynamics
Another slice of Steel Dynamic's optimistic pie comes in the form of a recently implemented capacity to produce enormous lengths of railroad tracks. We all know what Warren Buffett thinks of the long-term outlook for American railroads, and Steel Dynamics is now well positioned for a build-out in railroad infrastructure with a facility that can efficiently produce 1,600-foot lengths of "continuously welded rail." Although the company continues to note pronounced weakness within structural steel and some value-added product lines, this new rail facility has enjoyed a "dramatic increase in orders for welded rail."
Commercial weakness for Commercial Metals
As long-anticipated weakness in commercial real estate has finally piled atop relentless softness in the residential home construction market, the end result has driven Commercial Metals
With all this unfortunate news dropping onto investors like an anvil, why on Earth are shares of Commercial Metals soaring in recent days? The answer appears to have more to do with the rumor mill than any steel mill. First during late February, and then again Tuesday, shares of Commercial Metals surged on reported takeover speculation … with Nucor and Gerdau Ameristeel
Shooting up the tape … AK-Style
Not to be outdone, AK Steel
I have documented several of the long-term fundamental drivers that are conjoining to send prices for iron ore and coking coal substantially higher going forward. While I agree that vertical integration up the material supply chain presents an important buffer against such profitability constraints, I continue to view the adaptability to market dynamics inherent in the arc-furnace operators and a potential surge in scrap metal supply from programs like Cash for Appliances as compelling equalizing factors. Since I believe that margins are likely to remain tight for all domestic operators, I continue to highlight Nucor as the best in the business. With its celebrated corporate culture, well received market insight, and an exciting new joint venture that could open doors to key foreign markets, Nucor still strikes this Fool as the hottest name in domestic steel.