Because the shares of United States Steel (NYSE:X) fell in price recently after the company warned of a slowdown, we think it could be wise to avoid fundamentally weak steel stocks Nucor (NUE), POSCO (NYSE:PKX), and Tenaris (TS) now. Read on.According to the World Steel Association, global crude steel production fell 10.6% year-over-year in October to 145.7 million tonnes. An abrupt decline in demand has led to stagnant price trends in the steel industry. Furthermore, the shares of United States Steel Corporation (X) declined on Friday after the company issued fourth-quarter EBITDA guidance that failed to meet Wall Street’s expectations.
In addition, the debt crisis involving a major Chinese property developer has hit the performance of the world's second-largest economy’s steel sector, which is expected to affect the global scene given China’s dominance. With X having already issued a warning about a downturn for the steel industry, the segment remains volatile.
Therefore, we think it could be wise to avoid fundamentally weak steel stocks Nucor Corporation (NYSE:NUE), POSCO (PKX), and Tenaris S.A. (TS) now.