POSCO (PKX) in the Years Ahead

POSCO (NYSE:PKX) will no doubt be affected by the proposed slowdown in steel production in China which will also affect imports, as China will start rolling blackouts earlier than usual, which always is directed towards the steel industry in the country in the beginning of the process and onwards.

Tightening of the economy is also a major factor as China continues to attempt to rein in inflation after overstimulating the economy by printing money.

According to the China Iron & Steel Association, the Chinese government is pushing to slow down economic growth, with one of the consequences being the demand for steel slowing down.

Expectations are steel consumption in China will drop by up to 4.6 percent in 2011, with the minimum outlook being a 2.6 percent drop in consumption.

Higher input costs and product prices are weighing heavily on the industry, and it's not clear how much the industry will be able to past on to their customers before they cut back on buying.

Industry observers see the next five year as being challenging for the industry as far as growth goes.

POSCO participates in the manufacture and marketing of a variety of steel products in South Korea and around the world.

POSCO (PKX) closed Friday at $105.68, falling $1.39, or 1.30 percent.

Posco (PKX) (MEE) (PCX) (JRCC) Take Breather

Even with thermal coal demand rising, along with coal imports from China, POSCO (NYSE:PKX), Massey Energy (NYSE:MEE), Patriot Coal (NYSE:PCX) and James River Coal Co. (JRCC) still pulled back Thursday with the rest of the coal industry, as the sector took a breather.

Coal prices in China have been soaring as domestic producers face higher costs. That has led to Chinese utilities looking outside the country for cheaper prices.

According to China Coal Transport and Distribution Association imports in May will increase as a result of the domestic market conditions in the country.

Inventories at ports continue to be low, which should cause domestic coal prices to continue to push up, increasing the coal imports, which will benefit any coal producer with exposure in China.

POSCO closed Thursday at $109.08, falling $0.49, or 0.45 percent.

Steel's (AKS) (FRD) (NUE) (SUTR) (PKX) and China Demand

For the most part, as goes China so goes the demand for steel, and in that regard it doesn't look good for steel companies like AK Steel Holding Corporation (NYSE:AKS), Friedman Industries Inc. (AMEX:FRD), Nucor (NYSE:NUE), Sutor Technology Group, Ltd. (Nasdaq:SUTR) and POSCO (NYSE:PKX), which are going to be pressured in the years ahead from declining demand from the Middle Kingdom.

According to the China Iron & Steel Association, the Chinese government is pushing to slow down economic growth, which will result in demand for steel in the country to slow down.

Estimates under the current scenario for the steel sector have steel consumption declining in China by a minimum of 2.6 percent to as high as 4.6 percent in 2011.

Globally it doesn't look good for the next five years or so either, as the top estimates are for steel demand to grow at a 5 percent rate annually, although many think it'll be less than that.

In the short term, the U.S. steel industry should ship product at 14 percent above 2010 levels, reaching about 95 million tons in 2011.

All the companies are being affected by soaring iron ore prices and other inputs, which are putting stress on margins and earnings because buyers are hesitating to acquire product at too high of prices; something that will continue for several years.

For the steel industry, there isn't much to be optimistic about, no matter how the situation is spun. It's going to remain tough for some time.

AK Steel Holding Corporation closed Wednesday at $15.47, falling $0.36, or 2.27 percent.

Posco (PKX) (PVR) (ARLP) (WLB) (AHGP) Futures Look Bright as Coal will Predominate for Years

Coal demand should provide good returns for coal companies like Posco (NYSE:PKX), Penn Virginia Resource Partners (NYSE:PVR), Alliance Resource Partners, (NASDAQ:ARLP) Westmoreland Coal Company (AMEX:WLB), and Alliance Holdings GP, (NASDAQ:AHGP) for some time to come.

While the stories of the demise of coal have been going on for decades, a new report from the U.S. Energy Information Administration called the “Annual Energy Outlook,” again asserts coal will decline substantially over the next 25 years, although it seems a lot of things will have to happen almost perfectly for that to be the case.

But if there is a significant dent made in the demand from coal, it'll more than likely come from natural gas, not from the expensive and unreliable sources like wind turbines and solar energy. At this time so-called renewables supply about 11 percent of electricity in America.

If the past is any indicator, the projections of coal replacement are far too optimistic, and it is certain it will be a major part of electrical generation for decades.

Coal suppliers should continue to do well for years as coal demand continues, but it will probably be at a slower rate than in the past, and the amount of supply of metallurgical coal by a company will determine a lot of the success of each individual firm.

Steel Firms (PKX) (USAP) (MEA) (HSC) (GSI) Pressured on Low Growth Outlook

The steel sector, even with some strong recent quarters from companies, looks weak, as over the next five years it is projected to grow at a pace of about 5 percent or less annually, placing downward pressure on steel producers like POSCO (NYSE:PKX), Universal Stainless & Alloy Pr (Nasdaq:USAP), Metalico Inc. (AMEX:MEA), Harsco Corporation (NYSE:HSC) and General Steel Holdings, (NYSE:GSI). And that's the more positive outlook by most analysts. A large number don't believe growth will even happen at that rate.

A majority of steel companies are being pressured to increase prices on their products in order to protect margins and earnings as the price of inputs and commodities rise.

That's not to say steel demand is falling completely, because it's not. But rising demand in some segments doesn't guarantee rising profits, as the industry is experiencing. A number of weak economies around the world could cut also into demand if steel prices and products rise to prohibitive levels.

There's no way to spin the outlook for the steel industry positively. The industry will struggle for years even in the midst of strong demand in some segments, as they attempt to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.

Posco closed Friday at $110.30, gaining $1.62, or 1.49 percent.

POSCO (PKX) (HSC) (FRD) (CHOP) (MT) Pressured on Low Growth Steel Outlook

The steel industry, even with some strong recent quarters, looks weak, as over the next five years it is expected to grow at a pace of about 5 percent or less annually, putting downward pressure on steel producers like Harsco Corporation (NYSE:HSC), Friedman Industries Inc. AMEX:FRD), China Gerui Advanced Materials (Nasdaq:CHOP), POSCO (NYSE:PKX) and ArcelorMittal (NYSE:MT); although they traded a little stronger Thursday.

A majority of steel companies are being forced to raise prices on their products in order to protect margins and earnings as the price of inputs and commodities rise.

That's not to say steel demand is falling, because it's not. But rising demand doesn't guarantee rising profits, as the industry is experiencing. A number of weak economies around the world could cut also into demand if steel prices and products rise to prohibitive levels.

There's no way to spin the outlook for the steel industry positively.

The industry will struggle for years even in the midst of strong demand, as they attempt to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.

It also looks like the U.S. economy is starting to sputter again, and that's not good news for the steel industry either.

Metalico (MEA) (GSI) (AKS) (PKX) Close Up Even with Growth, Cost Concerns

The steel industry, even with some strong recent quarters, looks weak, as over the next five years it is expected to grow at a pace of about 5 percent or less annually, putting downward pressure on steel producers like Metalico Inc. (AMEX:MEA), General Steel Holdings (NYSE:GSI), AK Steel Holding Corporation (NYSE:AKS) and POSCO (NYSE:PKX), which closed up on Tuesday, even as they face the headwinds. And that's the more positive outlook by the majority of analysts. Many don't think growth will even happen at those modest levels.

A majority of steel companies are being forced to raise prices on their products in order to protect margins and earnings as the price of inputs and commodities rise.

That's not to say steel demand is falling, because it's not. But rising demand doesn't guarantee rising profits, as the industry is experiencing. A number of weak economies around the world could cut also into demand if steel prices and products rise to prohibitive levels.

Of course there a large varieties of companies with steel exposure, and each segment of the sector can represent strengths or weaknesses. So each unit and company will have to be watched closely for performance of course.

There's no way to spin the outlook for the steel industry in a positive manner. The industry will struggle for years even in the midst of strong demand as it attempts to work through the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.

Some winners will emerge, but over time it's not easy to pick any one that's going to stand out. Some have looked to larger companies who may be able to navigate through the higher costs better, but we'll see if that's the case, as it isn't always that simple because of the wide variety of products and costs and pricing power with each one.

Posco (PKX) (AHGP) (ICO) (CLD) Close Mixed as Thermal Coal Demand Soars

Alliance Holdings GP, (NASDAQ:AHGP), International Coal Group, Inc. (NYSE:ICO), Cloud Peak Energy Inc. (NYSE:CLD) and Posco (NYSE:PKX) close mixed as surging demand from China and India for thermal or steam coal, and to a lesser extent, coking or metallurgical coal, is pushing the price of coal up, as well as the share price of those coal companies and companies with coal exposure like ... who provide the needed energy source.

IN 2011 India should import about 60 million tons of thermal coal, a 17 percent increase over 2010's 47 million tons. China is expected to import about 70 million tons of thermal coal in 2012.

Thermal coal is used to generate electricity while coking coal is used to run steel plants.

Overall, thermal coal demand is projected to surpass 7 billion tons in 2011, according to U.S. coal producer Peabody Energy Corp. (NYSE:BTU).

Thermal coal will probably grow faster than oil and gas in 2011, soaring over 30 percent to a record, as demand from China and India climbs and Japan increases its imports to make up for nuclear power lost after the recent earthquake.

Daniel Brebner, an analyst for Deutsche Bank (NYSE:DB) in London, said in the early part of April that thermal coal will average $132 a ton this year and $145 in 2012. Those prices are similar to what other analysts have also projected for thermal coal prices in that time period.

Head of Rio Tinto Group’s Coal & Allied Industries Ltd. unit, Chris Renwick, said, “We expect strong demand growth in China and India will continue throughout 2011 and the long-term prospects are also bright. Our traditional Asian markets have returned to pre-global financial crisis demand levels.”

Posco (PKX) (ICO) (BTU) (CLD) Close Mixed as Thermal Coal Demand Explodes

Growing demand from China and India for thermal or steam coal, and to a lesser degree, coking or metallurgical coal, is driving the price of coal up, as well as the share price those coal companies and companies with coal exposure like International Coal Group, Inc. (NYSE:ICO), Peabody Energy Corporation (NYSE:BTU), Cloud Peak Energy Inc. (NYSE:CLD) and Posco (NYSE:PKX), all of which provide the needed energy source.

IN 2011 India is expected to import about 60 million tons of thermal coal, a 17 percent increase over 2010's 47 million tons. China is estimated to be looking at importing about 70 million tons of thermal coal in 2012.

Thermal coal is used to generate electricity while coking coal to run steel plants.

Overall, thermal coal demand is estimated to surpass 7 billion tons in 2011, according to U.S. coal producer Peabody Energy Corp. (NYSE:BTU).

Thermal coal will probably grow faster than oil and gas in 2011, increasing over 30 percent to a record, as demand from China and India soars and Japan adds to its imports to make up for nuclear power lost after the recent earthquake.

Daniel Brebner, an analyst for Deutsche Bank (NYSE:DB) in London, said in the early part of April, that thermal coal will average $132 a ton this year and $145 in 2012. Those prices are close to what other analysts have also projected for thermal coal prices going forward.

Head of Rio Tinto Group’s (NYSE:RIO) Coal & Allied Industries Ltd. (CNA) unit, Chris Renwick, said, “We expect strong demand growth in China and India will continue throughout 2011 and the long-term prospects are also bright. Our traditional Asian markets have returned to pre-global financial crisis demand levels.”

Posco (NYSE:PKX) closed Thursday at $111.13, falling $2.10, or 1.85 percent. Cloud Peak Energy Inc. ended the day at $19.94, up $0.28, or 1.42 percent. Peabody Energy Corporation closed at $66.02, jumping $1.12, or 1.73 percent. International Coal Group, Inc. closed the session at $10.87, rising $0.19, or 1.78 percent.

POSCO (PKX) (USAP) (ZEUS) (GGB) Pressured on Low Growth Outlook

The steel industry, even with some strong recent quarters, looks weak, as over the next five years it is expected to grow at a pace of about 5 percent or less annually, putting downward pressure on steel producers like Gerdau S.A. (NYSE:GGB), Olympic Steel Inc. (Nasdaq:ZEUS), Universal Stainless & Alloy (Nasdaq:USAP) and POSCO (NYSE:PKX), even with a couple of decent quarterly results coming from their peers, like Steel Dynamics (NASDAQ:STLD). And that's the more positive outlook by the majority of analysts. Many don't think growth will happen even at that rate.

A majority of steel companies are being pressured to raise prices on their products in order to protect margins and earnings as the price of inputs and commodities jump.

That's not to say steel demand is falling, because it's not. But the slowly rising demand doesn't guarantee rising profits, as the industry is experiencing at this time. A number of weak economies around the world could also cut into demand if steel prices and products rise to prohibitive levels.

There's no way to spin the outlook for the steel industry in a positive manner. The industry will struggle for years, even in the midst of better demand, as it attempts to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from the producers.

POSCO closed Thursday at $111.13, falling $2.10, or 1.85 percent. Universal Stainless & Alloy ended the session at $32.79, gaining $0.64, or 1.99 percent. Olympic Steel Inc. closed at $30.86, up $0.15, or 0.49 percent. Gerdau S.A. closed at $12.13, down $0.01, or 0.08 percent.

Steel Companies POSCO (PKX) (MT) (CRS) (SCHN) Get Boost from Consumption Report, (STLD)

Investors have suddenly become steel industry and company believers after the performance of Steel Dynamics, Inc. (Nasdaq:STLD) and the release of estimates for glow steel production by the World Steel Association, which pushed up the share price of ArcelorMittal (NYSE:MT), Carpenter Technology (NYSE:CRS), Schnitzer Steel Industries (NASDAQ:SCHN) and POSCO (NYSE:PKX) Wednesday.

Steel Dynamics gave as its reason for the optimism as growing backlogs in the company’s structural and rail division, but quietly added some of that could have been weather-related.

Also the projected global steel consumption growth of 5.9 percent didn't included the potential devastating effect the slowdown in Japan will have, as it's the largest consumer of steel in the world. Without that, the numbers are pretty meaningless. And it will take time, as with everything related to Japan at this time, before we know the full impact on steel and other sectors.

POSCO closed Wednesday at $113.23, gaining $2.73, or 2.47 percent. Schnitzer Steel Industries ended the day at $60.55, up $0.94, or 1.58 percent. Carpenter Technology closed at $44.05, jumping $0.85, or 1.97 percent. ArcelorMittal closed the session at $36.11, rising $1.15, or 3.29 percent.

Steel Firms US Steel (X) (MT) (PKX) (NUE) Jump on Steel Dynamics' Strength

Even though the results of Steel Dynamics (NASDAQ:STLD) gave steel stocks like ArcelorMittal (NYSE:MT), POSCO (NYSE:PKX), Nucor (NYSE:NUE) and US Steel (NYSE:X) a big boost Tuesday, overall, the steel industry looks weak over the next five years, as it is expected to grow at a pace of 5 percent or less annually, putting downward pressure on steel producers. And that's the more optimistic outlook by analysts. Most don't think growth rate will be that high.

Most steel companies are being forced to raise prices on their products in order to protect margins and earnings, as the price of inputs and commodities rise.

That's not to say steel demand is dropping, because it's not. But rising demand doesn't guarantee rising profits, as the industry is finding out. Weak economies around the world could cut into demand if steel prices and products rise to prohibitive levels.

There's no way to spin this in a positive manner. The industry will struggle for years even in the midst of strong demand, as they attempt to work out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from producers.

As for Steel Dynamics, it admits bad weather in February could have been the reason for the jump in March shipments. Even if steel companies in general have a good quarter to report, it's very doubtful it has changed the outlook over the next several years. It could be a chance to make some quick money though.

Steel Dynamics (NASDAQ:STLD) closed at $18.46, gaining $1.00, or 5.73 percent. US Steel closed at $52.74, rising $2.25, or 4.46 percent. Nucor closed at $45.70, jumping $0.92, or 2.05 percent. POSCO ended the session at $110.50, increasing $2.41, or 2.23 percent. ArcelorMittal closed at $34.96, gaining $0.75, or 2.19 percent.

POSCO (PKX) (WOR) (CRS) (GSI) Drop as Commodities Correct

A general correction in commodities prices as a result of the plunge in oil prices pressured the steel sector, with POSCO (NYSE:PKX), Worthington Industries, Inc. (NYSE:WOR), Carpenter Technology (NYSE:CRS) and General Steel Holdings, (NYSE:GSI) all closing down Tuesday.

Crude oil prices for May delivery were down as much as 63 cents, or 0.6 percent, to $105.62 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $106.01 at 10:14 a.m. Sydney time. Yesterday, it dropped $3.67 to $106.25. Prices fell 5.9 percent on April 11 and 12.

The U.S. raised its crude-oil price estimate for 2011 to an average $106.38 a barrel from $101.77 in March, according to the Energy Department’s Short-Term Energy Outlook.

General Steel Holdings closed Tuesday at $2.08, falling $0.18, or 7.96 percent. Carpenter Technology closed at $40.69, down $0.29, or 0.71 percent. Worthington Industries, Inc. closed at $20.19, dropping $0.27, or 1.32 percent. POSCO ended the session at $109.51, declining $0.91, or 0.82 percent.

Steel's (PKX) (NUE) (X) (AKS) Pressured on Low Growth Outlook

The steel industry is uninspiring as over the next five years it is expected to grow at a pace of 5 percent or less annually, putting downward pressure on steel producers like POSCO (NYSE:PKX), Nucor (NYSE:NUE), US Steel (NYSE:X) and AK Steel Holding Corporation (NYSE:AKS). And that's the more positive outlook from some analysts.

Many steel companies are being forced to increase prices on their products in order to protect margins and earnings, as the price of inputs and commodities continue to surge.

That's not to say steel demand is declining, because it's not. But rising demand doesn't guarantee rising profits, as the industry is finding out. Weak economies around the world could cut into demand if steel prices and products rise to prohibitive levels.

There's no way to spin this positively. The industry will struggle for years, even in the midst of strong demand as they try to figure out the balance between steel demand, rising inputs, and ability for companies and countries to afford price increases from them.

AK Steel Holding closed Friday at $15.78, falling $0.40, or 2.47 percent. US Steel closed at $52.80, down $0.91, or 1.69 percent. Nucor ended the session at $46.42, dropping $1.05, or 2.21 percent. Posco closed at $112.50, falling $0.05, or 0.04 percent.

US Steel (X), (MT), (SCHN), (STLD), (PKX) Jump on Japan Rebuilding Outlook

Shares of US Steel (NYSE:X), ArcelorMittal (NYSE:MT), Schnitzer Steel Industries (NASDAQ:SCHN), Steel Dynamics (NASDAQ:STLD) and POSCO (NYSE:PKX), along with other providers of raw materials, are all being pushed up on the expected enormous demand from Japan to rebuild the country once they get past the crisis point they're now in.

The only question is how much of the future will be priced in before the share price of companies like those listed above pull back.

Coal companies, diversified miners and other raw material providers should do well for some time, as the needs of Japan could reach unprecedented levels for years into the future.

Another thought to consider is how this will extend the commodity bull market, which many experts felt we were in the middle of. These could easily extend it several years, or possibly even a decade, depending on the extent of the damage done.

U.S. Steel closed Thursday at $54.74, gaining $0.81, or 1.50 percent. Posco closed at $108.66, up $3.55, or 3.38 percent. Steel Dynamics ended the session at $18.18, rising $0.38, or 2.13 percent.Schnitzer Steel Industries finished the day at $62.15, gaining $1.26, or 2.07 percent. ArcelorMittal climbed to $34.10, up $1.26, or 3.84 percent.

ArcelorMittal (NYSE:MT), POSCO (NYSE:PKX), Nucor (NYSE:NUE), US Steel (NYSE:X), AK Steel (NYSE:AKS) in 2010

It was a tough year for steelmakers, and most companies plummeted in the early part of April, never recovering in the year, like ArcelorMittal (NYSE:MT), POSCO (NYSE:PKX), Nucor (NYSE:NUE), US Steel (NYSE:X) and AK Steel (NYSE:AKS).

Nucor had the best performance of the steel companies listed here, not being as volatile throughout the year, and rebounding at the end of the year.

ArcelorMittal ended the year at $38.13, gaining $0.35 on December 31, up 0.93 percent. The company had a 52-week trading range of $26.28 to $49.41. They ended the year with a market cap of $57.58 billion.

POSCO closed the year out at $107.69, rising $0.25 on the last trading day, up 0.23 percent. The trading range for 2010 was from $87.80 to $140.34. They ended the year with a market cap of $33.18 billion.

Nucor finished off the year at $43.82, dropping $0.54 on Friday, a loss of 1.44 percent. The 2010 trading range for them was $35.71 to $50.72. They closed off the year with a market cap of $13.84 billion.

US Steel ended 2010 at $58.42, down $0.60 on the final trading day of the year, losing 1.02 percent. Their trading range for the year was $36.93 to $70.95. Their market cap heading into 2011 is $8.39 billion.

AK Steel finished 2010 at $16.37, gaining $0.26, or 1.61 percent on the last day of the year. Their 52-week trading range was $11.34 to $26.75. Their market cap at the end of the year was $1.80 billion.