Steel's (MTL) (GSI) (GGB) (HAYN) (IIIN) and China Demand

As goes China so goes the demand for steel, and in that regard it doesn't look good for steel companies like General Steel Holdings, (NYSE:GSI), Gerdau S.A. (NYSE:GGB), Haynes International Inc. (Nasdaq:HAYN), Insteel Industries Inc. (Nasdaq:IIIN) and Mechel OAO (NYSE:MTL) , 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.

Mechel OAO closed Wednesday at $25.77, falling $1.03, or 3.84 percent.

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.

Nucor (NUE) (WOR) (SUTR) (CRS) (GSI) 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 Worthington Industries, Inc. (NYSE:WOR), Sutor Technology Group, Ltd. (Nasdaq:SUTR), Carpenter Technology (NYSE:CRS), Nucor (NYSE:NUE) and General Steel Holdings, (NYSE:GSI); 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.

Harsco (HSC) (GSI) (CHOP) (SCHN) 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 General Steel Holdings, (NYSE:GSI), China Gerui Advanced Materials (Nasdaq:CHOP), Schnitzer Steel Industries (NASDAQ:SCHN) and Harsco Corporation (NYSE:HSC), 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.

Harsco Corporation closed Thursday at $34.41, gaining $0.44, or 1.30 percent. Schnitzer Steel Industries ended the session at $60.67, falling $0.02, or 0.10 percent. China Gerui Advanced Materials closed at $4.81, up $0.85, or 1.93 percent. General Steel Holdings closed at $2.12, level with its prior close.

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.

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 (MTL) (CMC) (CPSL) (SID) (GSI) 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 China Precision Steel, Inc. (Nasdaq:CPSL), Commercial Metals Company (NYSE:CMC), Companhia Siderurgica Nacional (NYSE:SID), Mechel OAO (NYSE:MTL) and General Steel Holdings (NYSE:GSI). And that's the more positive outlook from some analysts.

Steel companies listed represent a good cross section of the industry, as they're based in several countries.

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.

Mechel OAO closed Friday at $30.07, falling $0.65, or 2.12
percent. China Precision Steel, Inc. closed at $1.65, down $0.04, or 2.37 percent. Commercial Metals Company ended the session at $16.93, dropping $0.37, or 2.13 percent. Companhia Siderurgica Nacional closed at $16.83, falling $0.06, or 0.36 percent. General Steel Holdings ended trading at $2.29, down $0.04, or 1.72 percent.