Two notable performers today in Shanghai were Baoshan Steel and Anhui Cement, the largest Chinese players in their respective industries.
Nippon Steel in Japan also spiked, and reported that it is making money again.
Meanwhile, in the derivatives market steel forwards are spiking and the forward curve forecasts higher steel prices to come.
It’s a good time to review both U.S. steel companies, foreign steel producer ADR shares, and commodities/producers related to the same drivers as steel. From many angles, something appears to be brewing.
'It is reported that Wuhan Iron and Steel Co has signed a one year iron ore supply contract with Venezuela and the prices is lower than that settled between Japan and South Korea mills with Vale and therefore is referred as Chinese prices by media'
Some are arguing that this is a fluke, and shouldn't be considered relative to other negotiations, but let's see how things play out. Steel producers will surely pounce on this pricing benchmark.
Source: Steel Guru
Nippon Steel reported that it returned to a profit today, and rose in Tokyo earlier. Watch the ADR 'NISTY'.
'Talking about the steel market in general, he said it is improving in line with expectations. Yet more recently the de-acceleration in China, the macro uncertainty in Europe and traditional seasonal factors did create weakness in the market. 'However, we believe this correction is temporary; economic recovery continues slowly but surely and real demand continues to improve progressively around the world. While we should remain cautious, we still believe that the global steel market should grow by at least 10% in 2010.''
Source: Money Control
Input costs are rising, but steel prices could as well. Most importantly, global demand drivers are holding up, which was a concern over the last few months...
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