Core Insights - Commercial Metals Company (CMC) reported adjusted earnings per share (EPS) of 74 cents for Q3 fiscal 2025, missing the Zacks Consensus Estimate of 85 cents and reflecting a 27.5% decline year over year [1][10] Financial Performance - Net sales for the quarter were $2.02 billion, slightly down from $2.08 billion in the previous year but exceeding the Zacks Consensus Estimate of $2.01 billion [2] - Cost of goods sold decreased by 1% year over year to $1.72 billion, while gross profit fell 11.9% to $300 million [2] - Core EBITDA was reported at $204 million, down 20.3% year over year [2] Segment Performance - North America Steel Group generated net sales of $1.56 billion, down from $1.67 billion year over year, with adjusted EBITDA of approximately $186 million compared to $246 million in the prior year [3] - Europe Steel Group's revenues increased by 18.6% year over year to $247.6 million, with adjusted EBITDA turning positive at $3.6 million [4] - Emerging Businesses Group reported net sales of $197 million, up from $188.5 million year over year, with adjusted EBITDA growth of 7.9% [5] Cash Flow and Balance Sheet - Cash and cash equivalents at the end of Q3 fiscal 2025 were $893 million, up from $858 million at the end of fiscal 2024 [6] - Long-term debt increased to $1.30 billion from $1.15 billion at the end of fiscal 2024 [6] - Cash generated from operating activities for the nine months ended May 31, 2025, was around $400 million, down from $548 million in the prior year [6] Dividend Declaration - The company declared a quarterly dividend of 18 cents per share, payable on July 9 to shareholders of record as of June 30, 2025 [7] Future Outlook - CMC anticipates improved consolidated financial results in Q4 fiscal 2025 compared to Q3 [8] - The North America Steel Group's adjusted EBITDA margin is expected to increase sequentially, driven by higher steel product margins [9] - Financial results for the Emerging Businesses Group are projected to improve both sequentially and year over year due to project backlogs [9]

Core Insights - Commercial Metals (CMC) reported revenue of $2.02 billion for the quarter ended May 2025, a decrease of 2.8% year-over-year, with EPS at $0.74 compared to $1.02 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $2.01 billion by 0.49%, while the EPS fell short of the consensus estimate of $0.85 by 12.94% [1] Financial Performance Metrics - Average selling price per ton for raw materials in North America was $809, below the estimated $951.15 [4] - Steel products metal margin per ton in Europe was $293, slightly above the estimated $289.43 [4] - Average selling price per ton for downstream products in North America was $1,212, lower than the estimated $1,252.19 [4] - Cost of ferrous scrap utilized per ton in North America was $360, compared to the estimated $353.17 [4] - Steel products metal margin per ton in North America was $499, slightly above the estimated $495.12 [4] - External tons shipped for steel products in Europe totaled 359 thousand, exceeding the estimated 317.31 thousand [4] - Steel products tons shipped in North America were 798 thousand, below the estimated 812.17 thousand [4] Sales Performance - Net sales from external customers in North America were $1.56 billion, below the estimated $1.60 billion, representing a 6.5% decrease year-over-year [4] - Net sales from external customers in Corporate and Other were $12.65 million, slightly below the estimated $13.13 million, but showed a 30.1% increase year-over-year [4] - Net sales from external customers in Europe were $247.59 million, exceeding the estimated $215.88 million, reflecting an 18.6% year-over-year increase [4] Stock Performance - Shares of Commercial Metals have returned +5.5% over the past month, outperforming the Zacks S&P 500 composite's +0.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Steel Dynamics, Inc. (STLD) has provided earnings guidance for Q2 2025, estimating earnings per share (EPS) in the range of $2.00 to $2.04, an increase from $1.44 in Q1 2025 but a decrease from $2.72 in Q2 2024 [1][8] Group 1: Steel Operations - Profitability from steel operations is expected to be significantly higher than in Q1 2025, driven by wider metal spreads and an increase in average realized steel pricing, which is rising faster than scrap raw material costs [2] - Long product steel shipments have increased sequentially, while flat rolled volumes have slightly decreased due to inventory overhang from coated flat rolled steel imports [2] - The energy, non-residential building, automotive, and industrial sectors are continuing to drive demand for steel [2] - Steel division's pretax earnings are projected to be reduced by approximately $32 million in Q2 2025 due to a noncash write-off of consumable assets [2] Group 2: Metals Recycling Operations - Earnings from metals recycling operations are expected to remain stable sequentially in Q2 2025, with higher shipments compensating for lower realized pricing [3] Group 3: Steel Fabrication Operations - Earnings from steel fabrication operations are anticipated to decline in Q2 2025 compared to the previous quarter, attributed to consistent shipments and metal spread compression as raw material costs rise and average realized sales prices fall slightly [4] - The pace of order activity has increased, and the order backlog has strengthened, extending into 2025 with attractive pricing [4] - Demand is primarily driven by the commercial, data center, manufacturing, warehouse, and healthcare sectors [4] Group 4: Aluminum Operations - The aluminum team is successfully commissioning the Columbus, MS aluminum flat rolled products mill and the San Luis Potosi satellite recycled slab facility, with the first aluminum ingot cast in January 2025 in Mississippi and in March 2025 in Mexico [5] - The company expects to begin shipping material in mid-2025 [5] Group 5: Stock Performance - Shares of Steel Dynamics have decreased by 0.4% over the past year, contrasting with a 31.8% decline in its industry [5]

Financial Performance - Q3 Net Earnings reached $83.1 million[16] - Q3 Adjusted Earnings amounted to $84.4 million[16] - Q3 Core EBITDA was $204.1 million, with a Core EBITDA Margin of 10.1%[16] - Last 12 Months ROIC stood at 6.5%[16] Strategic Initiatives & Outlook - The company is executing a strategy to enhance its financial profile, exceeding targeted benefits from the Transform, Advance, Grow (TAG) program[15] - North American segment results improved sequentially, with steel product margins inflecting upward[15] - The company anticipates consolidated financial results in Q4 2025 to improve from Q3 levels, with higher margins over scrap on steel products in North America[41] Emerging Businesses Group (EBG) - EBG's L12M adjusted EBITDA was $130 million, with an EBITDA margin of 18%[37] - EBG contributed 15% of the company's total segment EBITDA[37] - Q3 net sales for EBG were up 4.7% year-over-year, while adjusted EBITDA increased by 7.0%[41] Europe Steel Group - Europe Steel Group exceeded breakeven performance during the quarter, with green shoots continuing to emerge[15] - Shipments for Europe Steel Group were up by 20.9% on a year-over-year basis[41]

Core Insights - Commercial Metals Company (CMC) reported financial results for the fiscal third quarter ended May 31, 2025, showing sequential improvement in performance driven by better market conditions across all segments [1][2] - The company achieved net earnings of $83.1 million, or $0.73 per diluted share, on net sales of $2.0 billion, compared to net earnings of $119.4 million, or $1.02 per diluted share, on net sales of $2.1 billion in the prior year [2][3] Financial Performance - Adjusted earnings for the third quarter were $84.4 million, or $0.74 per diluted share, down from $119.6 million, or $1.02 per diluted share, in the prior year [3] - The company's consolidated core EBITDA was $204.1 million with a core EBITDA margin of 10.1% [6] - Cash and cash equivalents totaled $893.0 million, with available liquidity exceeding $1.7 billion as of May 31, 2025 [4] Business Segments Overview - North America Steel Group saw a 1.6% increase in finished steel product shipments year-over-year and a 10.4% increase compared to the second quarter [6] - The Emerging Businesses Group reported net sales of $197.5 million, a 4.7% increase year-over-year, with adjusted EBITDA margin improving to 20.7% [10] - The Europe Steel Group achieved adjusted EBITDA of $3.6 million, recovering from a loss of $4.2 million in the prior year, with an adjusted EBITDA margin of 1.5% [12] Strategic Initiatives - The TAG program is gaining momentum, exceeding targeted EBITDA benefits, with an annual run-rate expected to exceed $100 million [6][14] - The company is positioned to benefit from structural trends in infrastructure investment, reshoring, and energy transition [2][14] Market Outlook - CMC anticipates improved consolidated financial results in the fourth quarter, with expectations for increased finished steel shipments and adjusted EBITDA margins [13] - The company expects to receive a CO2 credit of approximately $28 million in the fourth quarter due to Polish legislation [13]

Investment Rating - The report maintains an 'In-Line' industry view for the steel sector, indicating a balanced risk-reward profile [7]. Core Insights - Carbon steel prices are experiencing softening momentum, with continued downside risks expected in the near term due to unclear demand recovery [6]. - Stainless steel demand is anticipated to remain lackluster, trailing carbon steel recovery, with no inflection expected in 2025 [8]. - The sector is currently trading at a ~34% discount to its historical average on EV/normalized EBITDA, but consensus earnings downgrades for 2025 are anticipated [9]. Carbon Steel Summary - The report highlights that EU HRC spreads have risen above historical averages due to supportive trade policies and prospects for defense/infrastructure spending [6]. - ArcelorMittal and voestalpine are identified as the most preferred companies in carbon steel, with voestalpine showing resilience in EBITDA/t during the downturn [10]. - Thyssenkrupp shares have seen significant re-rating, but the report suggests that the current valuation may not reflect the underlying business's cash needs and earnings potential [10]. Stainless Steel Summary - Acerinox is favored in the stainless steel segment due to its resilient earnings profile and exposure to the US/alloys market [11]. - The report notes that Aperam's diversified business model may not be enough to counteract the weak demand in Europe, impacting near-term earnings momentum [11]. - The overall stainless steel market is expected to face challenges due to global growth concerns and below-average spreads in the EU/US [8]. Demand Drivers - Key demand drivers for steel include construction and automotive sectors, with significant contributions from building & infrastructure and mechanical equipment [21][22]. - The report emphasizes that the automotive sector's performance is crucial for steel demand, particularly in Western Europe and the US [27][30]. Supply and Trade Dynamics - The report discusses the steel supply landscape, noting that major producers in the EU and China are adjusting production levels in response to demand fluctuations [65][68]. - It highlights the net trade flows of steel, with China being a significant exporter, impacting the EU market dynamics [80][81]. Valuation and Performance - The report provides a snapshot of equity performance, indicating that steel equities have re-rated sharply, with some companies trading at premiums to their sum-of-the-parts valuations [10][12]. - The overall steel sector's performance is compared against indices like MSCI Europe and STOXX Europe, showing varied performance across different companies [13][16].

Investment Rating - The investment rating for Aluminum Corporation of China (Chalco) is "Buy" with a target price of Rmb9.62 per share based on a 2.22x 2025E P/B [18] - The investment rating for Baoshan Iron & Steel is "Buy" with a target price of Rmb8.2 per share based on a 0.85x 2025E P/B [22] - The investment rating for Tianqi Lithium is "Hold" with a target price of HK$23.0 for H-shares and Rmb26.26 for A-shares [24][27] Core Insights - The report indicates cautious market expectations regarding demand recovery in the aluminum sector in China, with a near-term pecking order of steel > aluminum > lithium > copper > gold > battery > thermal coal > cement [1] - Total aluminum production in China for the week of June 12-18, 2025, was 845kt, flat week-over-week (WoW), and up 3% year-over-year (YoY) [2] - Total aluminum inventory in China stood at 722kt on June 19, 2025, reflecting a 1% increase WoW but a significant 38% decrease YoY [3] - Apparent aluminum consumption in China was 849kt during the same week, down 6% WoW but up 5.8% YoY for the year-to-date [4] Production Summary - China's total aluminum production year-to-date reached 20.9 million tonnes (mnt), representing a 3.2% increase YoY, while aluminum billet production was 8.4mnt, up 6.2% YoY [2] - Aluminum billet production for the week was 365kt, flat WoW, and up 9% YoY [2] Inventory Summary - The total inventory of aluminum ingots was 493kt, down 3% WoW and 40% YoY, while aluminum billet inventory was 229kt, up 9% WoW but down 30% YoY [3] - The inventory levels are lower than the same period in 2021-2024 on a lunar calendar basis [7] Consumption Summary - Apparent consumption of aluminum ingots was 885kt, down 3% WoW but up 1% YoY, while aluminum billet apparent consumption was 329kt, down 7% WoW but up 3% YoY [4] - Year-to-date apparent consumption of aluminum in China reached 21.6mnt, reflecting a 5.8% increase YoY [4]

Investment Rating - The report maintains a "Buy" recommendation for the steel sector, highlighting specific companies for investment [3]. Core Viewpoints - The steel market is experiencing weak supply and demand, leading to price fluctuations. As of June 20, 2025, the price of 20mm HRB400 rebar in Shanghai is 3070 CNY/ton, unchanged from the previous week [1][10]. - Steel profits have increased slightly, with rebar, hot-rolled, and cold-rolled steel margins changing by +6 CNY/ton, +20 CNY/ton, and -26 CNY/ton respectively [1][3]. - Steel production has risen, with a total output of 8.69 million tons for major steel products, a week-on-week increase of 96,600 tons [2][3]. Summary by Sections Price Trends - As of June 20, 2025, various steel prices show mixed trends, with rebar prices stable at 3070 CNY/ton, hot-rolled steel increasing by 40 CNY/ton to 3240 CNY/ton, and cold-rolled steel decreasing by 30 CNY/ton to 3510 CNY/ton [1][10][11]. Production and Inventory - The total production of major steel products reached 8.69 million tons, with rebar production increasing by 46,100 tons to 2.12 million tons. Total social inventory decreased by 144,300 tons to 9.12 million tons [2][3]. Profitability - The report indicates a slight increase in steel profitability, with long-process steel margins showing minor increases while short-process margins have decreased [1][3]. Investment Recommendations - The report suggests focusing on the following companies: - For flat steel: Baosteel, Hualing Steel, Nanjing Steel - For special steel: Xianglou New Materials, CITIC Special Steel, Yongjin Co. - For pipe materials: Jiuli Special Materials, Youfa Group, Wujin Stainless Steel - Additionally, it recommends paying attention to high-temperature alloy companies like Fushun Special Steel [3].

Core Viewpoint - Huawei Cloud Stack aims to provide a hybrid cloud solution that better understands the needs of government and enterprise users in the era of intelligence, focusing on AI integration and data utilization [1][3]. Group 1: Huawei Cloud Stack Features - Huawei Cloud Stack will become the first hybrid cloud to adapt to CloudMatrix 384 super nodes, enabling enterprise customers to have their own cloud super nodes locally, enhancing AI computing power for intelligent transitions [3]. - Currently, Huawei Cloud Stack offers over 120 cloud services and more than 50 scenario-based solutions, maintaining the leading market share in the hybrid cloud sector across government, finance, and manufacturing for several consecutive years [3][4]. Group 2: User Segmentation and Solutions - Huawei Cloud Stack recognizes that government and enterprise users are not a monolithic group but can be categorized into four distinct roles: data center engineers, data engineers, AI algorithm model application engineers, and application development engineers [3][4]. - The platform supports users throughout the entire cloud lifecycle, from building to managing cloud resources, enabling efficient resource allocation, data governance, model training, and application development [4]. Group 3: Case Studies - In finance, Huawei Cloud Stack helped a state-owned bank establish a unified computing power platform, allowing data center engineers to deploy 106 DeepSeek R1 instances in just two days, improving efficiency by 70% compared to traditional bare-metal deployments [4][5]. - In manufacturing, Huawei Cloud collaborated with XCMG to create a robust big data platform, enhancing data analysis efficiency and enabling value extraction from operational data of construction machinery [4][5]. - In the steel industry, Xianggang utilized Huawei Cloud Stack to develop a one-stop AI development platform, achieving quality improvement and cost reduction through the deployment of a steel model across over 30 scenarios [5]. - In the energy sector, CNOOC implemented CodeArts to develop a digital platform, reducing development time by 30% and streamlining the deployment of intelligent oilfield management systems from one week to one day [5].

Core Viewpoint - ArcelorMittal has signed a sale and purchase agreement to divest its operations in Bosnia and Herzegovina, specifically the ArcelorMittal Zenica steel plant and the ArcelorMittal Prijedor iron ore mining business, to Pavgord Group, following a strategic review that deemed the sale as the best solution for business development [1][2]. Transaction Details - The transaction involves the sale of ArcelorMittal's shares in both ArcelorMittal Zenica and ArcelorMittal Prijedor, with all employees' jobs being transferred to the new owner. The company anticipates a non-cash loss on disposal of approximately $0.2 billion, which includes foreign exchange losses recorded in equity since acquisition [3]. - The deal is expected to close in the third quarter of 2025, pending merger control clearance and fulfillment of all conditions precedent. Until the closure, all operations will continue as usual with support from local management and company leadership [4]. Company Acknowledgment - ArcelorMittal expressed gratitude towards the government of Bosnia and Herzegovina and acknowledged the contributions of its employees at ArcelorMittal Zenica and ArcelorMittal Prijedor over the past 21 years, wishing them and Pavgord Group success in the future [5]. Company Overview - ArcelorMittal is a leading integrated steel and mining company with operations in 60 countries and primary steelmaking in 15 countries. In 2024, the company generated revenues of $62.4 billion, producing 57.9 million metric tonnes of crude steel and 42.4 million tonnes of iron ore. The company focuses on producing innovative steels that are energy-efficient, low in carbon emissions, and reusable, supporting the transition to renewable energy infrastructure [6].