BUZZ-Steel firms: Supply chain inventories still elevated with normalization 30-60 days away - Cowen
20/11/2019 14:29 RSF
** Brokerage Cowen says its recent survey on steel industry points to softer demand and elevated inventories, adding that respondents expect inventories to be in better balance within the next 30 to 60 days
** Analysts at Cowen say they prefer defensive positioning amid unsettled end markets; Name Nucor Corp (
NUE.N) and Reliance Steel & Aluminum Co (
RS.N) as top picks
** However, raises PT on United States Steel Corp (
X.N) by $1 to $11, Steel Dynamics Inc (
STLD.O) by $2 to $32, Nucor Corp (
NUE.N) by $3 to $62, citing individual drivers for the companies
** Cowen says executives and steel purchasing managers who participated in the survey further reduced their Q4 business outlooks over the past two weeks, referring to weakness in original equipment manufacturers market and challenged export demand, among other factors
** 2020 annual contract settlements are expected to settle $20-$40/ton below 2019 levels, with challenged demand in key end markets and elevated supply chain inventories the culprits - Brokerage
** Steel distributors express limited appetite to pursue imports at this juncture, with current import spreads relatively unattractive across all product categories - Cowen