We think that it would be prudent to steer clear of fundamentally weak stocks of steel because shares of United States Steel (NYSE) dropped in value recently, after the company had warned about a slowdown. Nucor (NUE), POSCO Now, Tenaris (TS), (NYSE:) Continue reading. According to the World Steel Association (NYSE:), and Tenaris (TS) now, world crude steel production declined 10.6% in October from 145.7 million tonnes to 145.7million tonnes. The steel industry has been experiencing stagnant prices due to a sudden drop in demand. Furthermore, the shares of United States Steel Corporation (X) declined on Friday after the company issued fourth-quarter EBITDA guidance that failed to meet Wall Street’s expectations.
In addition, the debt crisis involving a major Chinese property developer has hit the performance of the world’s second-largest economy’s steel sector, which is expected to affect the global scene given China’s dominance. The steel sector is volatile despite X already warning against a possible downturn.
We believe it would be prudent to steer clear of fundamentally weak stocks like Nucor Corporation (NYSE :NUE), POSCO(PKX) and Tenaris S.A.
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