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.

Steel Firms (FRD) (SYNL) (GGB) (X) (SCHN) 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 Friedman Industries Inc. (AMEX:FRD), Synalloy Corp. (Nasdaq:SYNL), Gerdau S.A. (NYSE:GGB), US Steel (NYSE:X) and Schnitzer Steel Industries (NASDAQ:SCHN). 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.

US Steel closed Friday at $47.71, gaining $0.05, or 0.10 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) (HAYN) (IIIN) (FRD) 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 Haynes International Inc. (NASDAQ:HAYN), Insteel Industries Inc. (NASDAQ:IIIN), Friedman Industries Inc. (AMEX:FRD) and Metalico (AMEX:MEA) , 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.

Haynes International Inc. closed Thursday at $50.36, gaining $0.47, or 0.94 percent. Insteel Industries Inc. ended the session at $14.42, gaining $1.12, or 8.42 percent. Friedman Industries Inc. closed at $10.15, dropping $0.21, or 2.04 percent. Metalico closed at $5.61, up $0.04, or 0.72 percent.

Insteel (IIIN) (FRD) (GSI) (CMC) Jump on Steel Dynamics' Results

Even though the results of Steel Dynamics (NASDAQ:STLD) gave steel stocks like Commercial Metals Company (NYSE:CMC), Insteel Industries Inc. (Nasdaq:IIIN), Friedman Industries Inc. (AMEX:FRD) and General Steel Holdings (NYSE:GSI) 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 like. And that's the more optimistic outlook by analysts. Most don't think growth will be at that rate.

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. Insteel Industries Inc. closed at $13.23, rising $0.10, or 0.76 percent. General Steel Holdings closed at $2.12, jumping $0.04, or 1.92 percent. Friedman Industries Inc. ended the session at $10.37, increasing $0.17, or 1.67 percent. Commercial Metals Company closed at $16.16, gaining $0.18, or 1.13 percent.

Friedman (FRD) (ROCK) (CMC) (SUTR) Drop as Commodities Correct

A general correction in commodities prices as a result of the plunge in oil prices pressured the steel sector, with Friedman Industries (AMEX:FRD), Gibraltar Industries (Nasdaq:ROCK) Commercial Metals (NYSE:CMC) and Sutor Technology (Nasdaq:SUTR) 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.

Friedman Industries closed Tuesday at $10.43, falling $0.07, or 0.67 percent. Sutor Technology closed at $1.62, down $0.02, or 1.22 percent. Commercial Metals closed at $16.42, dropping $0.06, or 0.36 percent. Gibraltar Industries ended the session at $11.48, declining $0.59, or 4.89 percent.