Core Insights - Nucor Corporation (NUE) and Steel Dynamics, Inc. (STLD) are leading steel producers in the U.S., crucial for the domestic steel industry and relevant for investors amid rebounding steel prices [1] - U.S. steel prices fell sharply in 2024 but have recently increased due to tariffs and improving demand, benefiting domestic steelmakers [2][3] Nucor Corporation (NUE) - Nucor is the largest steel producer in North America, investing $6.5 billion in eight major growth projects through 2027 to enhance production capacity [5] - The company has made strategic acquisitions, including Southwest Data Products and Rytec Corporation, to expand its product portfolio and create cross-selling opportunities [6] - Nucor has a strong balance sheet with $4 billion in liquidity and returned $2.7 billion to shareholders last year, maintaining a 52-year history of dividend increases [7] - The current dividend yield is 2% with a payout ratio of 36% and a five-year annualized dividend growth rate of 7.9% [8] - Nucor faces demand weakness in markets like heavy equipment, which accounted for 28% of its total shipments in 2024 [8][9] Steel Dynamics, Inc. (STLD) - Steel Dynamics focuses on customer needs and market diversification, with ongoing projects to enhance capacity and profitability [10] - The company is ramping up operations at a new electric arc furnace mill in Sinton, TX, expected to significantly contribute to revenues [11] - STLD generated $1.8 billion in cash flow from operations in 2024 and has $2.6 billion in liquidity, ensuring it can meet debt obligations [13] - The company raised its quarterly dividend by 9% to 50 cents per share, with a dividend yield of 1.6% and a payout ratio of 26% [14] - Automotive market slowdowns have impacted STLD, with significant declines in North American automotive production affecting steel consumption [15] Price Performance and Valuation - NUE stock has decreased by 35.6% over the past year, while STLD has lost 6.7%, against an industry decline of 36.8% [16] - NUE trades at a forward earnings multiple of 12.05, a 15.6% premium over the industry average of 10.42 [19] - STLD trades at a forward earnings multiple of 11.22, below NUE but above the industry average [22] - The consensus estimate for NUE's 2025 sales suggests a 2.4% increase, while EPS is expected to decline by 11.5% [21] - In contrast, STLD's 2025 sales and EPS estimates imply increases of 3.4% and 3.5%, respectively, with positive trends in EPS estimates [23] Investment Outlook - Both NUE and STLD are positioned to benefit from rising steel prices and trade policies, but STLD is favored due to better valuation and growth prospects [25]

Core Viewpoint - Posco's shares have recently declined by 7.8% over the past two weeks, but the formation of a hammer chart pattern suggests potential support and a possible trend reversal in the future [1][2]. Technical Analysis - A hammer chart pattern indicates a minor difference between opening and closing prices, with a long lower wick, suggesting that the stock may have found support after a downtrend [4][5]. - The occurrence of a hammer pattern at the bottom of a downtrend signals that bears may have lost control, indicating a potential trend reversal [5]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for Posco, with a 2.9% increase in the consensus EPS estimate for the current year over the last 30 days, indicating that analysts expect better earnings than previously predicted [7][8]. - Posco currently holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9].

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government ...

Company Overview - Nucor is a large and diversified U.S. steelmaker that operates entirely on electric arc mini-mills, allowing for more flexibility compared to traditional blast-furnace technology [2][4] - The company produces steel and fabricated steel products, including building components and parts for the electrical grid, which helps in generating higher-margin products with sustainable demand [5] Industry Dynamics - The steel industry is cyclical, and Nucor's stock price tends to fluctuate significantly between periods of price increases and declines [6][12] - Currently, Nucor's stock is down over 45% from its early 2024 high, but historically, such declines are not unusual for the company [7][10] Investment Perspective - The recent stock price has seen an increase of around 8% from its April low, suggesting a potential inflection point, although it could also be a temporary price movement [9] - Long-term investment in Nucor should focus on buying during downturns when the market sentiment is negative, as this could present a good buying opportunity [12][13] - Nucor's management consistently reinvests in the business, particularly during downturns, to emerge stronger post-recession [10]

Investment Rating - The report provides a "Buy" rating for several companies in the basic materials sector, including Angang-H, Baosteel, Conch-A, and Zijin-A, indicating a positive outlook for these stocks with potential upside ranging from 22% to 51% [10]. Core Insights - The feedback from producers as of mid-May suggests that end-user order books were flat month-over-month (MoM), which is softer than past seasonal trends. Infrastructure recovery has paused, reflected in weak cement shipments and a lack of funding for new projects [1][2]. - Current Chinese demand for cement and construction steel is reported to be 12-14% lower year-over-year (YoY), while demand for copper has increased by 9% YoY. The demand for flat steel and aluminum is 1-3% lower YoY [1]. - The report highlights that while the supply chain is partially replacing US-bound shipments with production from other countries, the reduction in Chinese metal demand is less severe than initially feared [1]. Summary by Sections Downstream Demand Snapshots - The downstream order book trend was mostly stable MoM in May, with 25% of respondents indicating a pickup in the downstream sectors and 31% indicating a lower trend [2][3]. Steel Production - Steel production cuts are in preparation, and rush orders for exports are re-emerging. The report suggests that steel-making raw materials could potentially drop to sub US$80-90 per ton if production cuts are implemented [9]. Cement Market - The cement market has experienced a sudden deterioration, with current demand showing significant declines [9]. Aluminium and Copper - The report notes a disruption in Guinea bauxite supply affecting alumina, while copper demand remains more resilient than expected [9]. Coal Market - The coal market is characterized by very weak demand and pricing, indicating challenges for companies in this sector [9]. Lithium Market - The lithium market is facing a rising surplus, which may impact pricing and demand dynamics [9]. Paper Packaging - Improving shipment trends are noted in the paper packaging sector, driven by upcoming online shopping festivals and lower US-China tariffs [9].

A tugboat pushes a barge near the U.S. Steel Corp. Clairton Coke Works facility in Clairton, Pennsylvania, on Sept. 9, 2024.President Donald Trump said Friday that U.S. Steel and Nippon Steel will form a "partnership," after the Japanese steelmaker's bid to acquire its U.S. rival had been blocked on national security grounds. "This will be a planned partnership between United States Steel and Nippon Steel, which will create at least 70,000 jobs, and add $14 Billion Dollars to the U.S. Economy," Trump said i ...

Company Insights - Vertiv announced a strategic alignment with Nvidia for AI data centers, focusing on the deployment of 800 VDC power architectures, with a comprehensive portfolio expected in the second half of 2026 [1] - Medical Properties Trust reported a quarterly FFO of 14 cents per share, missing the analyst consensus estimate of 15 cents, and quarterly sales of $223.80 million, which also fell short of the $229.81 million estimate [2] - Nucor Corporation reported better-than-expected earnings for the first quarter, with earnings of 77 cents per share, surpassing the consensus estimate of 64 cents, and quarterly sales of $7.83 billion, exceeding the $7.23 billion estimate [3] Stock Performance - Vertiv shares increased by 0.6% to settle at $104.20 [5] - Medical Properties Trust shares decreased by 1.3% to close at $4.56 [5] - Nucor shares fell by 0.9% to settle at $110.69 [5]

Investment Rating - The report provides a mixed investment rating for various companies in the basic materials sector, with specific recommendations such as "Buy" for companies like Angang-H and Conch-H, while others like Maanshan-A and Chinacoal-H are rated as "Sell" [10]. Core Insights - The overall sentiment in the basic materials sector is that current demand is less concerning than previously anticipated, with a notable deceleration in local government special refinancing bond issuance impacting infrastructure recovery [1]. - Current Chinese demand for cement and construction steel is reported to be 12-14% lower year-on-year, while copper demand has increased by 9% [1]. - The downstream order book trend has remained mostly stable month-on-month, with 31% of respondents indicating a lower trend in May for basic materials [2][3]. Summary by Sections Downstream Demand Snapshots - Infrastructure recovery has paused due to a lack of funding for new projects, leading to weak cement shipments [1]. - The demand for construction materials is showing signs of weakness, particularly in cement and construction steel, while copper demand remains resilient [1]. Steel Production - Steel production cuts are in preparation, with a potential reduction in prices if these cuts are implemented [1]. - The report notes that rush orders following the reduction of US-China tariffs were limited, primarily driven by Southeast Asia [1]. Commodity Prices - The pricing for steel and cement has remained stable, while prices for aluminum and copper have improved, contrasting with the softening of coal and lithium prices [1]. Specific Company Insights - Angang-H is rated as "Buy" with a target price of CNY 2.40, indicating a potential upside of 45% [10]. - Conch-H is also rated as "Buy" with a target price of CNY 29.00, reflecting a 37% upside potential [10]. - Companies like Maanshan-A and Chinacoal-H are facing downward pressure, rated as "Sell" with target prices significantly lower than current prices [10].

Core Insights - Chinese steel giants are investing heavily in Kazakhstan's iron ore sector, with significant projects like a $2 billion plant by New Ming Casting and a million-ton steel project by Shougang Group, despite the presence of 9 billion tons of iron ore in Xinjiang [1][3] Group 1: Iron Ore Quality and Costs - Xinjiang's iron ore is abundant but of lower quality, with only 132 million tons of rich ore and an average iron content of 40%-50%, compared to Kazakhstan's 65% [3][5] - The smelting cost in Xinjiang is 23% higher than in Kazakhstan, costing an additional 300 yuan per ton, which significantly impacts profitability [3][5] - Transportation costs in Xinjiang account for 30% of total costs, making it less competitive compared to Kazakhstan, where mining operations are more centralized and efficient [3][5] Group 2: Kazakhstan's Mining Advantages - Kazakhstan has proven reserves of 9.1 billion tons and potential reserves of 17 billion tons, with major deposits in Kostanay region that are highly attractive to global steel manufacturers [5][8] - Mining efficiency in Kazakhstan is 40% higher due to advanced Chinese smart mining systems, which also contribute to lower environmental impact [5][10] - Chinese companies are establishing integrated operations in Kazakhstan, such as Shougang's 3 million-ton short-process steel plant located directly at the mining site, reducing transportation costs [5][8] Group 3: Strategic Diversification - The dual strategy of maintaining Xinjiang's iron ore as a strategic reserve while capitalizing on Kazakhstan's rich resources allows for better negotiation power in the global iron ore market [8][11] - The collaboration between China and Kazakhstan enhances the Belt and Road Initiative, creating a direct railway link from Kazakhstan's iron ore to Lianyungang, thus strengthening trade routes [8][11] - Technological advancements from Kazakhstan, such as hydrogen-based steelmaking, are being utilized to upgrade Xinjiang's mining operations, transforming lower-quality ores into valuable resources [8][11] Group 4: Environmental Considerations - Environmental regulations in Xinjiang are stringent, and large-scale mining could lead to significant ecological damage, whereas Kazakhstan's vast, sparsely populated areas present lower environmental risks [10][11] - Chinese investments in Kazakhstan include water recycling systems that also address desertification, showcasing a dual benefit of mining and environmental management [10]

Group 1: Kohl's Corporation (NYSE: KSS) - Kohl's CEO was terminated for violating company policy related to undisclosed conflicts of interest in vendor transactions [2] - The CEO directed the company to conduct business with a vendor he had a personal relationship with, resulting in favorable terms for the vendor [2] - Following the CEO's termination, Kohl's stock experienced a significant drop on unusually heavy trading volume [2] Group 2: Cleveland-Cliffs Inc. (NYSE: CLF) - Cleveland-Cliffs reported a larger than expected adjusted loss and an 11% year-over-year revenue decline to $4.63 billion for Q1 2025 [3] - The company announced plans to fully or partially idle six steel plants due to underperforming non-core assets and lower index prices [3] - Cleveland-Cliffs' share price fell from $8.49 to $7.15 following the financial results announcement, a decline of $1.34 per share [3]