Steel sector downgraded; shares drop
(Reuters) - Shares of U.S. steel producers fell on Thursday after a Wall Street analyst downgraded the sector on the belief that prices of the metal will decline.
Analyst Tony Rizzuto of Dahlman Rose & Co cut his investment rating for AK Steel Holding Corp (AKS.N) to "sell" from "hold," and Nucor Corp, Steel Dynamics Inc (STLD.O) and U.S. Steel Corp (X.N) to "hold" from "buy."
"Recent domestic price increases have not been matched internationally, potentially inviting increased imports later this year and placing a de facto ceiling on domestic prices," Rizzuto wrote in a research note.
"Growing international price divergences, a potential scrap price decline in September, and continued demand weakness - particularly in China - should place a cap on domestic price increases," he added.
In morning trading on the New York Stock Exchange, U.S. Steel was down 3.6 percent at $21.94, Nucor dropped 2.2 percent to $39.65, and AK Steel was down 2.7 percent at $5.76. On Nasdaq, Steel Dynamics was 2.6 percent lower at $12.72.
(Reporting by Steve James in New York; Editing by Lisa Von Ahn)
- South Korea's Park says conduct of ferry crew tantamount to murder |
- Putin playing the long game over Russian kin in Ukraine
- Japan PM makes offering to Yasukuni Shrine, angers China, South Korea |
- Ukraine peace deal falters as rebels show no sign of surrender |
- UAW union withdraws objection to lost election at VW Tennessee plant