Key Takeaways CMC's North America Steel Group posted $294M adjusted EBITDA, up 57.9% y/y.Steel products margin rose $132 per ton, reaching its highest level in three years.TAG initiatives and Arizona 2 Micro-Mill support CMC amid strong construction demand.Commercial Metals Company (CMC) has been gaining from robust demand in North America for each of its major product lines. In the North America Steel Group segment, the steel products metal margin increased by $132 per ton in the fiscal first quarter 2026 ...

Steel Dynamics Raises Bid to Increase Its American Production Capacity - Barron'sSkip to Main ContentThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.# Steel Dynamics Raises Bid for BlueScope. How It Plans to Ramp Up U.S. Production.By [Al Root]ShareResize---ReprintsIn thi ...

Core Insights - Commercial Metals Company's (CMC) Transform, Advance, Grow (TAG) Program aims to enhance margins, earnings, cash flows, and return on invested capital (ROIC), with an expected annualized EBITDA benefit of $150 million by fiscal 2026 [1][8] Group 1: TAG Program Overview - Launched in 2024, the TAG program focuses on optimizing logistics, reducing input consumption, lowering costs, and improving energy efficiency through over 150 individual projects across all business segments [2] - The program has already led to improvements in melt shops and rolling mills, resulting in higher product volumes while maintaining energy and raw material consumption levels [2] - CMC anticipates significant and lasting transformation in its margin profile from the TAG program, alongside strong market dynamics and effective operational execution [4] Group 2: Performance and Market Position - CMC has experienced success in optimizing scrap, improving yield, and cost mix, maintaining solid momentum in the TAG program during the first fiscal quarter [3] - CMC shares have increased by 51.3% over the past year, outperforming the industry growth of 50.1% and the Zacks Basic Materials sector's return of 47.2% [7] - The Zacks Consensus Estimate for CMC's fiscal 2026 sales is projected at $8.89 billion, reflecting a 13.9% year-over-year increase, with earnings expected to rise by 134.5% to $7.34 per share [11] Group 3: Competitive Landscape - Cleveland-Cliffs Inc. is implementing cost-reduction initiatives, targeting a decrease in steel unit costs by $150 per ton over three years, while Steel Dynamics, Inc. is developing a lower-carbon facility to enhance its product portfolio [5][6] - CMC is currently trading at a forward price/sales ratio of 0.96, compared to the industry's 1.77, indicating a favorable valuation [10]

Market Overview - The S&P 500, Nasdaq, and Dow all experienced declines for the week, marking their largest weekly losses since November, with the S&P 500 falling 1.39%, Nasdaq declining 2.1%, and Dow decreasing 1.23% [6][12] - Heavyweight technology and communications services stocks ended lower, contributing to market jitters ahead of the Presidents Day holiday [12][13] Inflation and Interest Rates - U.S. consumer prices increased less than expected in January, leading traders to raise the probability of a 25 basis point interest-rate cut in June to 52.3% from 48.9% [12][13] Sector Performance - Large-cap tech stocks, particularly Nvidia and Apple, were significant drags on the S&P 500, while Applied Materials provided a strong boost with an 8.1% increase after positive revenue forecasts [8][12] - Defensive utilities and real estate sectors were the top gainers, with utilities up 2.69% and real estate up 1.48% [8][12] - The S&P 500 software and services index closed up 0.9%, contrasting with a 0.5% decline in the tech sector [6][12] Market Sentiment - Market sentiment remains cautious, with predictions of choppy trading ahead due to the upcoming U.S. midterm elections and the anticipated transition of Fed Chair Jerome Powell to Kevin Warsh [7][12] - Historical trends indicate that market volatility often accompanies Fed leadership changes during midterm years [7] Trading Activity - Advancing issues outnumbered decliners on both the NYSE and Nasdaq, with a ratio of 2.57-to-1 on the NYSE and 1.92-to-1 on the Nasdaq [10][11] - The S&P 500 recorded 34 new 52-week highs and 6 new lows, with a total of 18.61 billion shares traded, below the 20.75 billion moving average for the last 20 sessions [11][12]

Market Overview - Overseas stock markets closed lower on Friday, with the Euro Stoxx 50 down by -0.43%, China's Shanghai Composite down -1.26%, and Japan's Nikkei Stock 225 down -1.21% [1] - The S&P 500 Index closed up +0.05%, the Dow Jones Industrial Average up +0.10%, and the Nasdaq 100 Index up +0.18% [7] Earnings Reports - More than two-thirds of S&P 500 companies have reported Q4 earnings, with 76% beating expectations. S&P earnings growth is expected to rise by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth [2] - Rivian Automotive reported Q4 revenue of $1.29 billion, exceeding the consensus of $1.26 billion, and forecasted full-year vehicle deliveries of 62,000 to 67,000 [13] - Applied Materials reported Q1 adjusted EPS of $2.38, better than the consensus of $2.21, and forecasted Q2 adjusted EPS of $2.44 to $2.84 [14] - Airbnb reported Q4 gross booking value of $20.4 billion, surpassing the consensus of $19.46 billion, and forecasted Q1 revenue of $2.59 billion to $2.63 billion [16] Sector Performance - Software stocks rallied, with Crowdstrike Holdings up more than +4% and ServiceNow up more than +3%, contributing to the overall market support [10] - Metal companies retreated due to reports of the Trump administration working to narrow tariffs on steel and aluminum products, with Century Aluminum down more than -7% [12] - Cryptocurrency-exposed stocks rose, led by Coinbase Global, which closed up more than +16% after Bitcoin rallied more than +4% [11] Economic Indicators - US January CPI rose +2.4% year-over-year, weaker than the expected +2.5%, marking the smallest increase in 7 months [3] - Falling bond yields were bullish for stocks, with the 10-year T-note yield falling to a 2.25-month low of 4.05% [6]

Core Viewpoint - The potential rollback of steel tariffs by President Donald Trump is causing a decline in U.S. steel and aluminum stocks, which have previously benefited from these tariffs supporting higher commodity prices [1]. Group 1: Impact on Steel Stocks - U.S. steel stocks experienced a drop due to concerns over the possible reduction of tariffs that have been instrumental in maintaining elevated commodity prices [1]. - The article highlights that the recent strength in steel and aluminum stocks was largely attributed to the import tariffs imposed by President Trump [1]. Group 2: Market Reactions - The fears surrounding the potential tariff rollback have led to a negative sentiment in the market, particularly affecting companies involved in the steel sector [1]. - The decline in stock prices reflects investor anxiety regarding the future pricing environment for steel and aluminum if tariffs are reduced [1].

Company Overview - Steel Dynamics, Inc. (STLD) is a leading steel producer and metal recycler in the United States, based in Fort Wayne, Indiana, with a market capitalization of $29.1 billion. The company operates through various segments including Steel Operations, Metals Recycling Operations, Steel Fabrication Operations, and Aluminum Operations [1]. Stock Performance - STLD shares have significantly outperformed the broader market over the past 52 weeks, surging 50.8%, while the S&P 500 Index has increased by 12.9%. Year-to-date, STLD stock is up 17.7%, contrasting with a slight decline in the S&P 500 [2]. - The stock has also outperformed the State Street Materials Select Sector SPDR ETF (XLB), which has risen by 19.2% over the same period [3]. Recent Financial Results - On January 26, STLD shares fell by 4.4% following the release of Q4 2025 results, where net income decreased to $266 million ($1.82 per share) from $404 million ($2.74 per share) in Q3. This decline was attributed to a 35% sequential drop in operating income from steel operations to $322 million, driven by lower realized steel prices, seasonal demand weakness, and planned maintenance outages that reduced flat-rolled production by an estimated 140,000 to 150,000 tons [5]. Future Earnings Expectations - For the fiscal year ending in December 2026, analysts project STLD's earnings per share (EPS) to increase by 70.1% year-over-year to $13.59. The company's earnings surprise history is mixed, having beaten consensus estimates in three of the last four quarters while missing once. Overall, STLD stock holds a consensus "Strong Buy" rating, with eight out of eleven analysts recommending "Strong Buys" and three suggesting "Holds" [6]. Analyst Ratings - On January 9, Morgan Stanley analyst Carlos De Alba downgraded Steel Dynamics from a "Buy" to a "Hold" rating, setting a price target of $194. Currently, the stock is trading above the mean price target of $192.40, with the highest price target of $200 indicating only marginal upside from current levels [8].

Economic Indicators - The number of Americans filing for initial jobless claims fell by 5,000 to 227,000, compared to the expected 222,000 [2] - U.S. existing home sales decreased by 8.4% month-over-month to a 16-month low of 3.91 million, weaker than the expected 4.16 million [2] - The Consumer Price Index (CPI) rose 2.4% annually, a notable drop from the previous month, with a monthly increase of 0.2% [5] Stock Market Performance - Wall Street's major indices ended in the red, with significant declines in the Magnificent Seven stocks, including Apple (AAPL) down 5% and Tesla (TSLA) down over 2% [4] - Cisco Systems (CSCO) plunged over 12% after reporting weaker-than-expected FQ2 adjusted gross margin and issuing tepid FQ3 guidance [4] - Equinix (EQIX) surged over 10% after issuing strong FY26 guidance, marking it as the top percentage gainer on the S&P 500 [4] Corporate Earnings - Notable companies such as Moderna (MRNA) and Advance Auto Parts (AAP) are set to release their quarterly results [6] - Pinterest (PINS) plunged over 19% in pre-market trading after reporting weaker-than-expected Q4 revenue and issuing below-consensus Q1 revenue guidance [13] - Applied Materials (AMAT) surged over 11% in pre-market trading after posting stronger-than-expected FQ1 results and issuing strong FQ2 guidance [13] International Market Developments - The Euro Stoxx 50 Index is down 0.09% as investors digest fresh corporate earnings reports and await key U.S. inflation data [7] - Eurozone's GDP growth for the fourth quarter stood at 0.3%, in line with preliminary estimates [8] - Spain's annual inflation rate eased more than expected in January, with CPI falling 0.4% month-over-month and rising 2.3% year-over-year [8] Pre-Market Movements - U.S. steel stocks slid in pre-market trading after reports of President Trump's plans to roll back some tariffs on steel and aluminum products, with Steel Dynamics (STLD) down over 4% [12] - Most chip stocks are moving lower in pre-market trading, with Micron Technology (MU) and Intel (INTC) falling more than 1% [12]

Group 1: Company Overview - Gerdau (NYSE:GGB) is a Brazilian multinational steel producer that closed at $4.35, up 2.59% on Wednesday [1] - The stock has increased by 1,370% since its IPO in 1999 [1] Group 2: Market Performance - Trading volume for Gerdau reached 63 million shares, which is approximately 286% above its three-month average of 16.3 million shares [1] - The broader U.S. markets finished little changed, with the S&P 500 unchanged at 6,941.5 and the Nasdaq Composite easing 0.16% to 23,066 [2] Group 3: Economic Indicators - The U.S. added 130,000 jobs in January, with unemployment falling to 4.3%, influencing expectations for Federal Reserve rate cuts [3] - A strong economy could lead to higher steel prices, providing a favorable environment for steelmakers like Gerdau in 2026 and beyond [4] - Gerdau's stock is trading near a 52-week high, having increased by 45% over the past six months [4]

Core Viewpoint - BlueScope Steel is not currently in discussions with potential buyers Steel Dynamics and SGH, but the company is open to a takeover proposal that aligns with its expectations [1] Company Summary - The new chief executive officer of BlueScope Steel has indicated the company's openness to takeover proposals [1]