CHICAGO, Nov. 11, 2011 /PRNewswire/ -- Today, Zacks Equity Research discusses the Metals & Mining, including ArcelorMittal (NYSE: MT), U.S. Steel Corp. (NYSE: X) and Nucor Corporation (NYSE: NUE).
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A synopsis of today's Industry Outlook is presented below. The full article can be read at
http://www.zacks.com/stock/news/64435/Metals+%26amp%3B+Mining+Stock+Outlook+-+Nov.+2011
Overall, apparent steel use in the EU is projected to increase by 7.0% in 2011 to 155.0 mmt. In 2012, the growth of steel demand is expected to stall in most of the European countries with the notable exception of Poland which is forecast to post an impressive 9.5% growth. Overall, apparent steel use in the EU is forecast to grow by 2.5% to around 158.9 mmt in 2012, bringing it back to only 80% of the 2007 peak.
Japan's steel use is expected to decline by 2.7% to 61.8 mmt in 2011 due mainly to the disruptions caused by the earthquake. In 2012 apparent steel use in Japan is forecast to show a growth of 0.8% to reach 62.3 mmt, 77% of the 2007 level.
In the Commonwealth of Independent States (CIS, consisting of Russia and 10 other former Soviet Union republics), apparent steel use is forecast to grow by a strong 14.4% in 2011 and then by 7.5% in 2012. These projections will bring the region's apparent steel use in 2012 to almost 60 mmt, a new high for the region.
Steel demand in Middle East-North Africa (MENA) region is expected to fall by 0.9% in 2011, mainly due to downward revisions from North African countries. However, boosted by high oil prices, steel use in the region is forecast to resume growth in 2012 at a rate of 8.7%. Given that the political situation in the region is far from settled, considerable uncertainties hold out a threat to the current forecasts for this region.
In the third quarter 2011, sales of ArcelorMittal (NYSE: MT), the world's largest steel-producing company, increased 22.6% year over year to $24.2 billion from $19.7 billion in the year-ago quarter but decreased 3.6% sequentially from $25.1 billion. Sales were down sequentially primarily due to lower average steel selling prices (-1.7%) and lower volume of shipments (-4.9%). Total steel shipments in the third quarter of 2011 were 21.1 million metric tons compared with 20.5 million metric tons in the year-ago quarter.
Similarly, sales for U.S. Steel Corp. (NYSE: X) improved 13% year over year to $5.1 billion from $4.5 billion, in line with the Zacks Consensus Estimate of $5.1 billion. Shipments totaled 5.5 million tons, and were down by 0.8% year over year.
Nucor Corporation (NYSE: NUE) sales surged 27% year over year to $5.25 billion beating the Zacks Consensus Estimate of $4.86 billion. The growth was attributable to an increase of 24% in average price per ton and a rise of 3% in shipments (to 5.8 million tons) to outside customers. Steel mill shipments grew 9% to 4.2 million tons during the quarter.
Currently, Nucor has a Zacks #3 Rank (Hold) for the short-term (1 to 3 months) while U.S. Steel holds a Zacks #3 Rank (Hold). ArcelorMittal currently retains a Zacks Rank #5 Rank (Strong Sell). We maintain our Outperform recommendation in the long term for ArcelorMittal and U.S. Steel, while we maintain a long-term Neutral recommendation on Nucor.
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