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Dahlman Rose on Metals & Mining: Downgrading Steel Sector as Global Pricing Held Hostage (AKS, MT, NUE, STLD, X)

August 23, 2012 9:34 AM EDT Send to a Friend
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Price: $8.04 -3.25%

Rating Summary:
    6 Buy, 11 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 25 | Down: 19 | New: 23
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Dahlman Rose on Metals & Mining: Downgrading Steel Sector as Global Pricing Held Hostage

Analyst, Anthony B. Rizzuto, said, "We are lowering our ratings on the domestic steel producers, as we believe the next move in steel prices will be lower. 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 suggested that the July bottoming (in July) for steel stocks and then subsequent rally is justified, however, now industry fundamentals point to a move lower. Imports are now looking more attractive that domestic servicers. He suggests scrap prices will fall along with continued weakness in iron ore prices.

Dahlman downgrades AK Steel (NYSE: AKS) from Hold to Sell. PT $5.

ArcelorMittal (NYSE: MT), Nucor (NYSE: NUE), Steel Dynamics (Nasdaq: STLD), U.S. Steel (NYSE: X) all lowered from Buy to Hold




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