Latest news with #steelmakers
Reuters
7 hours ago
- Business
- Reuters
Markets bet Beijing is getting serious about China's overcapacity
BEIJING/HONG KONG, July 24 (Reuters) - Commodity prices from steel to polysilicon have surged this month as Chinese investors bet Beijing is finally serious about addressing overcapacity across the world's second-largest economy. Prices for nine industrial commodities including coal, steel, polysilicon, a building block for solar panels, alumina and lithium carbonate have climbed by 10% to 68% this month while share prices in steelmakers, solar panel manufacturers and clean energy companies have outpaced the benchmark CSI 300 Index. The moves coincide with Beijing's call on July 1 to tackle "disorderly price competition," or overcapacity, and an acknowledgement it intends to deal with a persistent problem fuelling deflation at home and trade barriers abroad. Since then, state media has amplified that message with warnings against involution, a now-popular reference to competition so fierce it becomes self-destructive. "I think that addressed a big concern for investors, which is the profit margin squeeze on some of the very promising sectors," said Tai Hui, Asia Pacific chief market strategist at JPMorgan Asset Management. Champions of the old economy including steel and coal and newer industries such as solar panels and electric vehicles are grappling with overcapacity and falling prices, which had previously prompted many warnings but little action. This month, some of the reactions from ministries, regulators and local governments suggest Beijing's signal is being received. Two days after a top-level policy meeting on July 1 called for action, the industry ministry pledged to curb price wars in the solar sector. China's photovoltaic industry index is up about 11% this month. (.CSI931151), opens new tab Polysilicon prices are up 68% after local media reported that the two biggest producers were preparing to buy up smaller rivals and consolidate the sector. Last week, a lithium miner in northwest China was temporarily shut for non-compliant mining, leading speculators to bet that more closures could follow. This week, prices for coking coal used to make steel rose to their daily limit for three consecutive sessions after the National Energy Administration ordered inspections at mines to check for excess production. To be sure, Beijing has pushed supply-side reforms before, most recently about a decade ago to cut production in the cement, steel, glass and coal industries. However, the task is more difficult this time due to higher levels of private ownership in many of these industries, misaligned incentives at the local and national levels, and limited options for other sectors to absorb lost jobs. It's unclear how far authorities are determined to go in curbing production and which other sectors they may target. China's leadership is sending a clear and positive signal about their commitment to address overcapacity, but progress is likely to be much slower this time around and it could take a year or two to see improvement in company profits, said Laura Wang, Chief China Equity Strategist for Morgan Stanley based in Hong Kong. "In the next three to six months, we are relatively conservative in terms of how much actual capacity shutdown you would be able to see," Wang said.
Bloomberg
a day ago
- Business
- Bloomberg
Iron Ore Pulls Back From Five-Month High With Supplies in Focus
Iron ore retreated from the highest level since February as major miner Vale SA reported an increase in quarterly production, and investors weighed the outlook for demand in top importer China. Futures fell toward $104 a ton in Singapore, after surging more than 4% over two days as a mega-dam project in Tibet bolstered the demand outlook. Traders are also assessing efforts by Beijing rein in competition among steelmakers, potentially aiding mills' margins and supporting raw-materials prices.
Yahoo
3 days ago
- Business
- Yahoo
1 Magnificent Dividend King Down 30% to Buy and Hold Forever
Key Points Nucor is a U.S. steel giant and Dividend King. The company is diversified and has a strong business plan. Its stock is cyclical and out of favor right now. 10 stocks we like better than Nucor › Nucor (NYSE: NUE) is one of the largest steelmakers in North America, but that's not what separates it from the pack. The big story here is the fact that Nucor is a Dividend King. And right now, the stock appears to still be in Wall Street's doghouse, which could be a buying opportunity for investors whose holding period is forever. Here's what you need to know. What does Nucor do? Nucor makes steel, but this is only part of the story. The other piece is that it uses electric arc mini-mills in the process. This technology tends to be more flexible than blast furnaces that make primary steel. Thus, the company can ramp production up and down based on demand more easily. That allows it to support its profit margins through the industry's cycles. The steelmaking cycle is worth considering. Demand and pricing often rise and fall along with economic activity. Given the industrial importance of steel, that makes sense. However, it also means that the business is a bit volatile and the stock is prone to wide price swings. Right now, the stock is down around 30% from the peaks it achieved in 2024. That sounds like a huge decline, but it is actually an improvement from the more than 40% it had been down before a rally. Declines of 40% or more occurred in 2020 and 2022. So essentially, this is really just a normal swing. But that doesn't mean you should ignore the opportunity here. Nucor is a Dividend King Despite the inherent volatility of the steel sector, Nucor has managed to increase its dividend every single year for over 50 consecutive years. A company doesn't achieve Dividend King status by accident; it requires a strong business model that is well executed in both good markets and bad. In fact, management's goal is generally to produce higher highs and higher lows for its business. It does this with a capital investment plan that focuses on upgrading technology; expanding product offerings; and broadening out to include new, higher margin products. As the company's business grows so, too, does its capacity to generate revenue and earnings. And that leads to higher highs and higher lows on the earnings front over time. With roughly $3 billion in capital spending on tap in 2025, more growth seems likely for the business and the dividend. That said, it is important to highlight one thing: The dividend yield is only 1.7%. This isn't a stock you buy because you need income. It is a stock you buy because you want long-term exposure to the steel sector, and you want to get that exposure via the industry's most reliable dividend stock. You buy Nucor when Wall Street is putting it on sale As a cyclical stock, the best time to buy Nucor isn't when investors are enamored with it. The time to step aboard is when the stock is out of favor, which remains the case today. Would it have been better to buy when the stock was down over 40%? Sure, but 30% is still a material drawdown, and if you are intending to own Nucor for the long term, the price remains attractive. The key to the story, however, is that this Dividend King has proved that its business model can survive just about anything the market and the economy throws at it. Should you buy stock in Nucor right now? Before you buy stock in Nucor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nucor wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Reuben Gregg Brewer has positions in Nucor. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 1 Magnificent Dividend King Down 30% to Buy and Hold Forever was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
6 days ago
- Business
- Reuters
India's JSW Steel says low priced imports a concern after profit beats estimates
July 18 (Reuters) - India's top steelmaker JSW Steel ( opens new tab flagged concerns of cheaper steel imports on Friday after the company beat first-quarter profit estimates. Indian steelmakers have been under pressure from a surge in low-cost shipments primarily from China, prompting production cuts and job concerns across the industry. The government imposed a temporary 12% import tariff, locally known as safeguard duty in April to curb cheap imports. Although domestic steel prices improved quarter-on-quarter, they remained below year-ago levels. "There is a case for the government to consider the safeguard duty favorably, in terms of extension as well as in terms of the overall duty percentage," Jayant Acharya, chief executive of JSW Steel, said. Given that many countries are putting trade barriers, lower-priced imports are coming to India, which is impacting sentiment, Acharya said. He added that some low-priced imports from Russia also require monitoring. Earlier in the day, JSW Steel reported a consolidated net profit of 21.84 billion rupees ($253.52 million) for the three months ended June 30, exceeding analysts' average estimate of 20.39 billion rupees, supported by easing raw material costs. Revenue from operations largely remained flat at 431.47 billion rupees, as weaker year-on-year steel prices offset a 9% rise in sales volumes. JSW's total expenses decreased by 3.3% to 403.25 billion rupees, primarily due to a similar decline in the cost of materials consumed. JSW Steel's shares closed flat ahead of the quarterly results. ($1 = 86.1475 Indian rupees)
News.com.au
14-07-2025
- Business
- News.com.au
‘Big problem': Choice that could decide Australia's economic future
Australia's over reliance on unexpected high iron ore prices to fix the national budget could be coming to an end, with a key choice from China to decide Australia's future. The Prime Minister held a roundtable on Monday with key local mining figures and Chinese steelmakers to spruik the benefit of buying Australian iron ore. Much of Australia's wealth is made off the back of the mining sector, as Australia pockets around $105bn in return for supplying China with around two-thirds of its iron ore needs. In 2024, Australia sold more than $150bn of iron ore around the world. But this relationship is coming under threat as China's huge steel manufacturing sector looks to decarbonise, meaning they could need the higher quality iron ore found in the likes of Brazil and Guinea. AMP chief economist Shane Oliver told NewsWire how damaging any changes to iron exports would be to the national economy depends on the pace of change. 'My take on that is if it occurs gradually over time, then Australia would adjust,' he said. 'If it occurs very quickly in a short space of time then it'd be a big problem.' 'It comes to the broader issue that about 35 per cent of our exports go to China,' Dr Oliver said. Dr Oliver flagged it could be any number of reasons which could impact Australia's iron ore miners, listing supply from other sources, a hit to the Chinese economy, geopolitical issues with the US as potential reasons for slowing this trade. He said while there was fresh interest in the issue in the context of other tensions between the two countries, the problem was nothing Australia hadn't endured before. 'I can understand why people love to talk about it, but it's been around for the last couple of decades and it is an issue,' he said. 'By the same token in a market economy like Australia, the decision of where our exports go is basically, I'd say 90 per cent driven by free markets and companies operating within that.' Despite the looming risks, Australia could remain 'the lucky country' based on two potential replacements to the country's large iron ore intake. 'We had been moving towards services exports, particularly education,' Dr Oliver said. 'That is why we have to be careful here that Australia doesn't shoot itself in the foot by restricting immigration that turns off the education export sector that is a potential replacement. 'I suspect if things had continued as they were we would have found a situation where in the next few years, education would've been our second highest export, ahead of gas and coal and just behind iron ore.' However, Australia is already struggling with a housing crisis and both major parties used the recent election to point to international students as a key reason why rents are skyrocketing. Previous research from the Property Council of Australia suggests just 4 per cent of rentals were taken up by international students, while a further 6 per cent was taken up by domestic students. The other aspect is a boost to the lithium and rare earths sector which is tipped to boom in future years. 'You want to make it easier for companies to develop new industries, with rare earths for example being a potential hedge [to iron ore],' he said, noting Australia had plentiful reserves.
