Everything you thought you knew about the steel industry was a lie, apparently.
In spite of Trump’s tough talk on China, steel prices have re-engaged the downside in recent month — which is wreaking havoc on the underlying shares in the sector.
spot iron ore, beatdown
Let’s think about the psychology behind this trade. It went from milquetoast to red hot, to retraction, to prolonged underperformance to despondency. After yesterday’s drubbing in X and today’s cataclysm in CLF, I am warming to the sector.
Here are some of the ‘returns’ for some of the more popular names, during 2017.
AKS -38%
X -31%
SID -27%
SCHN -26%
CLF -24%
ZEUS -23%
NWPX -19%
Valuation wise, the sector isn’t especially cheap or expensive, leaving the fate of the sector to human emotion. Is this the flushout?
My favorites in the space are in zinc, the metal used to galvanize steel. The best in the sector are HBM, TECK and VEDL.
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We need war and destruction for steel to be of any significant use by MIC. This war posturing won’t do it.
Suprised you aren’t hyping your ATI pick more. It’s ripe big squeezeeeee.
I am past the hype stage of my narrative.
the sharp X rebound today has me in agreement. the jokers are being removed the deck and the top hat gentlemen are now sitting down to the table and getting serious.