United States Steel Corp.
) hit a new 52-week high of $30.47 on Dec 30 and eventually
closed at $29.52.
Year-to-date, U.S. Steel's share price recorded a healthy return
of 24.86%. The company's long-term estimated earnings per share
(EPS) growth rate is 14.4%. Average volume of shares traded over
the last three months was approximately 7,147K.
What is Driving U.S. Steel Up?
U.S. Steel is actively engaged in improving its cost structure
and sustainably increasing revenues through its "Project
Carnegie" initiative, which includes measures like shutdown of
operations. These efforts are expected to deliver over $75
million in cost improvements annually.
U.S. Steel is considering an expansion of its iron ore pellet
operations at the Keewatin, Minn. (Keetac) facility, which will
increase production capability by approximately 3.6 million tons,
thereby augmenting its iron ore self-sufficiency. The company is
also examining alternative iron and steel making technologies
such as gas-based, direct-reduced iron and electric arc furnace
(EAF) steel making.
U.S. Steel is experiencing strong demand in the automotive space.
In early 2013, the company collaborated with specialty alloy
Carpenter Technology Corporation
) to develop lighter high-strength steel for automotive
applications. The collaboration will lead to growth opportunities
in the automotive market.
Further, U.S. Steel and Japan's Kobe Steel, in May 2013,
commissioned a new continuous annealing line at their joint
venture PRO-TEC Coating Company. The 500,000-ton PRO-TEC
continuous annealing line will produce the next generation of
Advanced High Strength Steels (AHSS) and Ultra High Strength
Steels (UHSS) having the superior strength, flatness and
formability which were earlier unavailable at these levels. These
better-quality steels will offer the customers critical design
solutions as automotive companies minimize the weight of
component materials to improve both strength and fuel economy for
ensuring passenger safety.
Several steps have been taken by U.S. Steel to gain long-term
access to high quality coke for its blast furnaces. The company
is in the process of constructing a technologically and
environmentally advanced battery at the Clairton Plant.
U.S. Steel also signed a 15-year coke supply agreement with
Gateway Energy & Coke Company, LLC (Gateway) in connection
with its 650,000 ton per year heat recovery coke plant which is
located at Granite City Works. Further, the company is in the
process of constructing a carbon alloy facility at Gary Works
which will utilize state-of-the-art technology for producing a
carbon alloy material to be used as a coke substitute. With the
Flat-rolled division's coke-making facilities and the Gateway
long-term supply agreement, it has the capability to be nearly
self-sufficient in terms of annual coke requirements at normal
Other Stocks to Consider
U.S. Steel currently carries a Zacks Rank #2 (Buy). Other players
in the industry, which look attractive at current levels, are
Companhia Siderurgica Nacional
AK Steel Holding Corporation
). While Companhia Siderurgica Nacional holds a Zacks Rank
#1(Strong Buy), AK Steel has a Zacks Rank #2.
AK STEEL HLDG (AKS): Free Stock Analysis
CARPENTER TECH (CRS): Free Stock Analysis
CIA SIDERUR-ADR (SID): Free Stock Analysis
UTD STATES STL (X): Free Stock Analysis
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