Financial Analysis of Steel Industry - Arcelormittal and Us Steel
Stock Evaluation Project - Steel Industry
Industry Analysis
Steel is a part of metals and mining industry which is highly cyclical in nature, and when the economy at large suffers, this industry suffers with it. The most recent five years have been a struggle for this particular industry along with uncertain economic indicators, and steel companies’ stocks have trended downwards. The metals and mining industry is comprised of companies that engage in exploration, mine development, and ore mining. The industry includes precious metals mining for metals such as gold, silver, platinum as well as mining and processing industrial metals such as steel, copper, & aluminum. The industry is mature, cyclical, capital intensive and dominated by large companies. Some of the major names in the Steel Sector of this industry are Commercial Metals (CMC), Steel Dynamics (STLD), Reliance Steel (RS), AK Steel (AKS), ArcelorMittal (MT), U.S.Steel (X). The US steel industry is currently worth more than $50 billion with annual growth rates around 1% to 2%. Process chains are long with high production volumes. Recently, large quantities of low-cost imports have impeded growth. However, the industry has seen enhanced productivity, energy efficiency, and higher yield due to restructuring, downsizing, and widespread implementation of new technologies. In the coming years, overcapacity and price instability may remain critical. Thereby, efficient production, better-suited products, enhanced capacity utilization and environmentally friendly practices are vital factors to future success. Demand comes from transportation, packaging, consumer electronics, construction, aerospace and power companies, which leads industry, overtly responsive to economic conditions. Companies are responding to pricing pressures through consolidation and vertical integration, which is aimed at streamlining the supply chain.
Future growth for the US metals and mining industry also depends upon demand from
Industry Analysis
Steel is a part of metals and mining industry which is highly cyclical in nature, and when the economy at large suffers, this industry suffers with it. The most recent five years have been a struggle for this particular industry along with uncertain economic indicators, and steel companies’ stocks have trended downwards. The metals and mining industry is comprised of companies that engage in exploration, mine development, and ore mining. The industry includes precious metals mining for metals such as gold, silver, platinum as well as mining and processing industrial metals such as steel, copper, & aluminum. The industry is mature, cyclical, capital intensive and dominated by large companies. Some of the major names in the Steel Sector of this industry are Commercial Metals (CMC), Steel Dynamics (STLD), Reliance Steel (RS), AK Steel (AKS), ArcelorMittal (MT), U.S.Steel (X). The US steel industry is currently worth more than $50 billion with annual growth rates around 1% to 2%. Process chains are long with high production volumes. Recently, large quantities of low-cost imports have impeded growth. However, the industry has seen enhanced productivity, energy efficiency, and higher yield due to restructuring, downsizing, and widespread implementation of new technologies. In the coming years, overcapacity and price instability may remain critical. Thereby, efficient production, better-suited products, enhanced capacity utilization and environmentally friendly practices are vital factors to future success. Demand comes from transportation, packaging, consumer electronics, construction, aerospace and power companies, which leads industry, overtly responsive to economic conditions. Companies are responding to pricing pressures through consolidation and vertical integration, which is aimed at streamlining the supply chain.
Future growth for the US metals and mining industry also depends upon demand from