- Steel and downstream stocks could be the bright spot amid volatility within metals and mining tied to macro trade risks, says Goldman Sachs (NYSE:GS) analyst Matthew Korn, adding that the sectors have fallen along with the rest of the group but without any visible significant cracks in fundamentals.
- Goldman’s updated commodity assumptions show lower near-term base metals prices, higher near-term domestic steel prices and an unchanged medium-term bullish view on copper.
- Given that steel prices are holding steady and no tariff exemptions are in place or in sight for NAFTA and the EU, Korn raises his U.S. steel price assumptions for H2 to an average of $855/ton HRC vs. $920/ton spot and $659/ton rebar vs. $698/ton spot.
- Among individual names, Korn expects Nucor (NUE) and Steel Dynamics (STLD +0.1%) to announce additional capital returns in their upcoming Q2 reports.
- Other relevant tickers include X, MT, AKS.
- ETFs: SLX, OTCPK:JJCTF, DBB, CPER, BOM, BDD, CUPM, JJM, BOS, RJZ, BDG, UBM, HEVY
- Source: Bloomberg First Word
- Earlier: Commodities set to rise as trade war fears oversold, Goldman analysts say (July 5)
- Now read: Base Metals 2nd-Quarter 2018 Review And Outlook For Q3 2018
Original article