All is Not Lost for Steel Stocks X, NUE and STLD as Steel Prices Decline

The uncertain economic environment is taking a toll on demand and lowering steel prices. This is impacting the profitability of steel companies, including United States Steel (NYSE:X), Nucor (NYSE:NUE), and Steel Dynamics (NASDAQ:STLD). Apart from lower average selling prices on steel, a spike in energy and input costs puts additional pressure on margins. Against this background, at least one of these stocks is still anticipated to beat the market. Let’s see what’s in store for these steel producers. 

United States Steel recorded a significant decline in its Q3 earnings, reflecting lower steel prices, higher raw material prices, and tough year-over-year comparisons. It delivered an adjusted EPS of $1.95 in Q3 compared to $5.70 in the prior year. 

Looking ahead, the lower average price realizations, a weak manufacturing outlook in Europe, and higher energy and input costs could all continue to hurt its bottom line. Its CEO, Jessica Graziano, expects the pace of decline in steel price would be in line with Q3. Graziano added, “Lower steel prices will continue to impact margins for the fourth quarter, reducing our average selling price sequentially.”