Credit Suisse lowers steel price deck, says 'fade the rally'
Credit Suisse analyst Curt Woodworth noted that mill outages and restocking have driven a sharp recovery in HRC steel prices from their October lows, but he suggests investors "fade the Q1 rally" as he sees U.S. HRC prices peaking in the first quarter before falling in the second half of 2020 as Big River ramps up Phase II, JSW more fully optimizes assets and imports rise. The global steel market is in recession and the firm estimates U.S. flat rolled demand for 2019 to be lowest in past six years, Woodworth noted. He has Outperform ratings on Nucor (NUE) and Commercial Metals (CMC), as he sees them having significant leverage to accelerating public infrastructure spending, keeps Underperform ratings on U.S. Steel (X) and AK Steel (AKS), which he sees having the most risk from supply side rebalancing, and maintains a Neutral rating on Steel Dynamics (STLD). NUE CMC X AKS MT STLD