For Immediate Release Chicago, IL – June 05, 2015 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includethe Nucor (NUE), U.S. Steel (X), AK Steel (AKS), Steel Dynamics ( STLD) and ArcelorMittal (MT). Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free. Here are highlights from Thursday’s Analyst Blog: U.S. Steelmakers Attempt to Stem 'Deluge' of Imports U.S. steelmakers have taken another big step against unfairly traded, low-priced imports that continue to flood the domestic market. The nation’s biggest steel producers joined forces to file anti-dumping and countervailing duty petitions with the U.S. Department of Commerce (“DOC”) and the U.S. International Trade Commission (“USITC”) against five countries accused for illegally dumping cheap corrosion-resistant steel. The United Steelworkers ("USW") union has also supported the petitions.
Corrosion-resistant steel is coated with a corrosion or heat-resistant metal such as zinc and aluminum to prevent corrosion, thus extending the service life of the products made from the steel. It is used in making automobiles, trucks, appliances, and industrial and agricultural equipment.
The petitions, which were filed by six major U.S. steelmakers including Nucor (NUE), U.S. Steel (X), AK Steel (AKS), Steel Dynamics (STLD) and ArcelorMittal USA – a part of ArcelorMittal ( MT) – charge that a torrent of significantly subsidized imports of corrosion-resistant steel from China, India, Italy, South Korea and Taiwan are causing material injury to the country’s steel industry.
Imports of corrosion-resistant steel from these countries have rocketed 85% between 2012 and 2014. These producers exported over $2.2 billion of corrosion-resistant steel to U.S. market last year.
These products are being illegally dumped by foreign steel producers in the American market at unfairly low prices that significantly undercut the prices of U.S. steelmakers. Low costs of production has enabled the overseas producers (especially China) to sell their products at cheaper rates, leading to an industry-wide price decline, hurting margins and earnings power of U.S. steelmakers in the process.
The petitions, which were submitted in response to surging volumes of cheap imports of corrosion-resistant steel from the alleged five countries over the past three years, also charge that these producers benefit from a number of countervailable subsidies provided by their respective governments. The petitions identified 48 different subsidy programs in China, 88 in India, 12 in Italy, 43 in Korea and 22 in Taiwan, all of which will be investigated by the DOC.
Imports of subsidized steel remains a significant concern for the ailing American steel industry that directly or indirectly supports over a million jobs. Domestic producers are struggling to defend their turf from a barrage of low-priced steel imports from foreign manufacturers and cope with falling steel prices as a result of the combined impact of imports and overcapacity in the industry. Price declines are expected to continue if tariffs are not imposed on imports.
According to the American Iron and Steel Institute ("AISI"), an association of North American steel makers, total and finished steel imports for the first four months of 2015 climbed 13% and 27% year over year, respectively. Market share of finished steel imports remains at an alarmingly high level of 33%, which is higher than 28% recorded for full-year 2014.
Steel imports shot up 38% year over year in 2014. Despite the U.S. steel industry’s depressed capacity utilization, imports continue to flow into the domestic market due to foreign producers’ overcapacity. A stronger dollar and rising demand has made the U.S. an attractive market for finished steel imports. Domestic steelmakers have suffered heavily due to a surge of subsidized steel imports, reflected by declined orders, idling of mills and layoffs across the country.
U.S. steelmakers prevailed in a key trade case in Aug 2014 after the USITC imposed anti-dumping orders against six countries accused for illegally dumping cheap Oil Country Tubular Goods ("OCTG") products that play a pivotal role in building and maintaining America’s energy infrastructure. The ruling allowed the DOC to go ahead with the issue of countervailing and anti-dumping duty orders on OCTG imports.
American steel producers continue to actively press Congress to stop unfair trade practices and enforce new trade laws to rescue the domestic steel industry. CEOs of leading U.S. steel companies asked Congress in March to take tougher actions to stop illegal foreign trade practices.
The USITC is expected to make a preliminary ruling within 45 days of the filing of the petitions to decide whether U.S. steel firms have been materially injured by the imports of corrosion-resistant steel. The DOC will issue preliminary duty rulings by end-2015 with final rulings by both agencies are expected to complete by the middle of next year. A victory in the new trade case will ensure a fairer and more competitive market for domestic steelmakers and workers.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> About Zacks Equity Research Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term. Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons. Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NUCOR CORP (NUE): Free Stock Analysis Report UTD STATES STL (X): Free Stock Analysis Report AK STEEL HLDG (AKS): Free Stock Analysis Report STEEL DYNAMICS (STLD): Free Stock Analysis Report ARCELOR MITTAL (MT): Free Stock Analysis Report To read this article on Zacks.com click here.
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