- U.S. Steel (X +3.6%), AK Steel (AKS +4.8%), Nucor (NUE +1.3%) and Steel Dynamics (STLD +1%) are higher amid speculation that flooded scrap yards in Houston could pinch steel supplies in the U.S. (NYSEARCA:SLX)
- “People are looking at the potential for extra steel demand from a bunch of scrap yards that are all flooded and out of commission, so tightening scrap in that region could help steel prices,” Clarksons Platou analyst Lee McMillan tells Bloomberg, adding that “historically, mini mills have looked to pass on higher scrap prices to customers."
- McMillan estimates that ~200K automobiles and many appliances will be junked because of Harvey-related flooding, saying "there’s some incremental steel demand that will come of this - we just don’t know how much."
- KeyBanc's Philip Gibbs also sees U.S. ferrous metals including steel getting a boost in prices, as Houston handles 30%-35% of U.S. steel imports, creating a "relative tactical positive" for steel companies.
- Also: CLF +4.5%, CMC +3%, MT +1.2%, RS +1.3%.
- Source: Bloomberg First Word
- Now read: Hurricane Harvey Recovery Idea: United States Steel Corp.
Original article