InvestIdeas

US: 3 Steel Stocks to Buy Ahead of Donald Trump’s Initiatives

Steel stocks should be boosted by Donald Trump's tariffs and infrastructure moves

By Larry Ramer

X’s forward P/E is around 9.1.

Source: Investor Place

http://investorplace.com/2017/05/3-stee ... Q0_Q9J96M8

China serious in slashing steel capacity but excess production still coming down the road

Cutting capacity does not mean lower steel production for China

China pledged early last year to cut 150 million tonnes of excess capacity by 2020. The move, along with rising steel trade barriers and an infrastructure spending splurge by Beijing, helped global steel prices surge 45 per cent since December 2015.

But Chinese steel prices have slipped in recent weeks on concerns about a slowdown in construction and infrastructure projects.

Output in China, which accounts for half of global steel production, rose 4.6 per cent in the first quarter to 201.1 million tonnes, after a 1.2 per cent increase to 808.4 million tonnes last year.

China, which holds nearly half the world’s 800 million tonnes of spare capacity, cut 65 million tonnes of capacity in 2016 and aims to cut another 50 million tonnes this year.

Iran and Russia, amongst others, have added new capacity beyond their domestic needs. “They’ll start to export much more, so for sure China’s cuts won’t be enough,”

OECD said global steel capacity rose 1.4 per cent in 2016 to 2.39 billion tonnes.

Iran has 19 projects planed between now and 2019 that will expand capacity by almost 24 million tonnes, adding to existing estimated capacity of 28 million tonnes now,

Source: SCMP

http://www.scmp.com/business/commoditie ... tion-still

Chart of the day: Shanghai steel rebar futures shine

by Nicole Elliott

Rather sooner than expected, Shanghai steel rebar futures have broken above the 50-day moving average to retest the psychological resistance level of 4,000 yuan (US$586) per tonne.

Open interest has also risen, suggesting many are participating in the latest rally and, though relatively low, momentum is clearly bullish.

Therefore, we shall continue with our positive outlook and expect further rallies this year, possibly as soon as this month, with a weekly close above 4,000 yuan targeting the next area of resistance at about 4,500 to 4,625 yuan.

Based on the height of the large right-angled triangle that has been building since late last year, a squeeze to 4,900 to 5,000 yuan cannot be ruled out and will probably take foreign investors by surprise.

Source: SCMP

http://www.scmp.com/business/commoditie ... ures-shine

These U.S. steel companies are forging a comeback

by Nick Rokke

The U.S. needs steel, and it looks like more of it will come from U.S. steel companies.

Source: Palm Beach Daily

http://thecrux.com/these-u-s-steel-comp ... -comeback/

Watch rock turn into steel at 3,000 degrees
http://money.cnn.com/video/news/2017/06 ... index.html

Citi says bear market soon for iron ore as Chinese port stocks peak
http://www.cnbc.com/2017/06/19/citi-say ... -peak.html

Chart of the day: Iron ore grinds on support

by Nicole Elliott

The front-month iron ore futures contract on the Dalian Commodity Exchange has been grinding against long-term support for 10 weeks or so.

The gentle upward-sloping trend line taken from the record low in December 2015 has almost captured all recent lows – except the dragonfly doji, which itself denotes instability.

A second dragonfly last week has seen the first attempt at rallying from Fibonacci retracement support, which coincides with a cluster of lows in the second and third quarters of last year.

From oversold on the RSI for ages, this now looks set to move higher and the MACD is poised to turn bullish. We shall pencil in a rally to the area between 570 yuan (US$84) and 600 yuan per tonne.

Source: SCMP

http://www.scmp.com/business/commoditie ... ds-support

China’s steel industry body wants Beijing to get tougher with Trump over possible US import curbs

China Iron and Steel Association officer says China should be bold in protecting its own businesses and avoid “being led by the US by the nose”

One reason for the fruitless talks in Washington was that China refused to agree to US demands that it eliminate excess steel capacity, Reuters reported.

Steel is not a big item in the bilateral trade relationship, with annual turnover of US$520 billion,

China produces more than half the world’s steel, but 90 per cent of that output is for its own domestic use.

Chinese exports of steel products dropped 3.5 per cent in 2016 to 108 million tonnes, partly because of anti-dumping and countervailing investigations against Chinese steel products in importing countries.

The US imported 30.1 million tonnes of steel last year, but only 1.13 million tonnes, or 3.8 per cent, were actually from China.

In steel exports to the US, China fell behind Canada, South Korea and Turkey, according to the US Department of Commerce.

After more than a decade of steel-related trade disputes, steel shipments to the US accounted for just 1 per cent of China’s total steel exports last year.

Although China exported only 10 per cent of its steel output, even that limited volume is bigger than the combined steel production of the US and Britain.

Although China said it had shut down 65 million tonnes of capacity last year amid Beijing’s effort to curb pollution and reduce excess supply, its actual output of crude steel still climbed 1.2 per cent in 2016.

In the first half of this year, Chinese crude steel output rose 4.6 per cent from a year earlier to 420 million tonnes, according to China’s National Bureau of Statistics.

China’s first-half exports of steel products by volume fell 28 per cent from a year earlier to 41 million tonnes, China’s customs data showed.

Source: SCMP

http://www.scmp.com/news/china/economy/ ... trump-over

Chart of the day: Outlook for Shanghai steel shines

by Nicole Elliott

Continuing with our positive outlook for Shanghai steel rebar futures, despite their lengthy struggle with Fibonacci 61 per cent retracement resistance at 3,972 yuan (US$590.60) per tonne and the psychological 4,000 yuan per tonne, we are watching for a weekly close above here.

All aspects of the weekly Ichimoku cloud chart system are bullish, especially the large cloud itself, and hopefully the lagging line will get a lift from the top of the triangle pattern.

The next area of resistance will be about 4,500 to 4,625 yuan in the event of a strong close this week and, based on the height of the large right-angled triangle, a squeeze to 4,900 to 5,000 yuan cannot be ruled out.

Open interest has risen sharply this year, meaning this move matters to many.

Source: SCMP

http://www.scmp.com/business/commoditie ... eel-shines

China's steel prices are rising and that's worrying Beijing

China's steel prices are on the rise

In March, Beijing announced plans to slash steel capacity by 50 million metric tons this year in efforts to tackle pollution and curb excess supply

Higher prices translates to better profits for industry, but it also means increased costs for sectors like construction that use much of the alloy

by Sophia Yan

So far this year, steel rebar futures have rallied on the Shanghai Futures Exchange — the September 2017 contract is up 40 percent to date, and is sitting today at around 4,131 yuan, according to Reuters data.

Source: CNBC.com

https://www.cnbc.com/2017/08/10/chinas- ... CKW,XE9T,1