U.S. Steel (X) Stock Slumps On Chinese Export Data, Lower Steel Prices
14 October 2016
Shares of U.S. Steel (X) were dropping 5.74% to $16.50 in early-afternoon trading on Thursday due to weak export data from China and falling steel prices.
The General Administration of Customs in China said the country's exports fell by 10% year-over-year in September, while analysts had been looking for a 3.2% drop. The wider-than-expected decline was due to lower demand, CNBC reports.
"[China's] domestic demand is equally weak as global demand," UBS said, according to CNBC.
Axiom Capital also noted that U.S. hot rolled coil steel prices have declined to about $496 per ton in recent weeks, which is below a "psychologically [important] $500 per ton threshold."
"This is not good for U.S. steel mills," the firm said in a note cited by Barron's.
Additionally, Macquarie reduced its price target on U.S. Steel stock to $13 from $20 earlier today following lower steel prices, the Fly reports.
But Macquarie noted that there is now less incentive for imports to reduce prices in the U.S.
The firm has an "underperform" on the shares.
U.S. Steel is a Pittsburgh-based integrated steel producer.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "sell" with a ratings score of D.
The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and poor profit margins.
Source : thestreet.com