The Enquirer
Shares of West Chester-based AK Steel and other steel companies rose Monday after some manufacturers announced price hikes last week, fueling expectations of improving demand.
AK Steel’s shares increased 4.8 percent on Monday to close at $8.59. U.S. Steel’s share price increased 6.4 percent to $31.64, while Steel Dynamics rose 3.1 percent to $15.49.
The steel industry should see demand growing stronger and prices rising as inventories have dwindled, UBS analyst Shneur Gershuni said in a research note Monday.
“We may see buyers blinking and prices moving up from here,” wrote Gershuni. “Imports, quite attractive six weeks ago, should decrease and buyers may be forced to restock into rising prices.”
Gershuni expects U.S. Steel’s earnings to grow faster this year with improving demand, lower costs and higher prices. He reiterated his “buy” rating on the Pittsburgh manufacturer’s shares and raised his 12-month price target to $47 from $38 per share.
UBS also raised its ratings for Nucor and Steel Dynamics Inc.
On Friday, AK Steel said earnings next quarter should benefit from improving overall business conditions and growing automotive demand.
In the current quarter ending March 31, AK Steel said it expects a net loss in the range of 11 to 15 cents a share as steel shipments decline to 1.3 million tons, down about 7 percent from the preceding quarter.
The World Steel Association said global crude steel production was a record 1.5 billion tons last year, up about 7 percent from 2010. In North America, steel production also rose nearly 7 percent to 118.9 million tons.
