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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (615)	7/24/2001 10:14:32 PM
From: craig crawford	Respond to of 1643

July 24, 2001 USX-U.S. Steel Reports a Loss Narrower Than Expected and Sees Market Bottom public.wsj.com By Robert Guy Matthews Staff Reporter of The Wall Street Journal USX-U.S. Steel Group benefiting from lower energy prices and higher sales, reported a narrower-than-expected loss for the second quarter and said it believes the U.S. steel market has finally hit bottom. .............................................................................................................................. The U.S. steel industry entered a slump four years ago, when cheaper foreign imports began inundating the market, pushing down steel prices and eroding domestic producers' market share. The recent economic slowdown has further reduced overall demand, underlining the risks as the industry remains reluctant to curtail production. Since 1997, at least 18 domestic steel makers have filed for bankruptcy-court protection from creditors. "While domestic commercial conditions remain difficult, demand and pricing appear to have bottomed out in the 2001 second quarter. Since that time, our order book has strengthened and prices have stabilized," said U.S. Steel Chairman Thomas J. Usher. Recent declines in natural-gas prices have been "a major positive on the cost side," he said. Also, the company has switched to lower-cost coal and fuel oil to power its mills, reducing its natural-gas usage by about 25% in the second quarter from a year earlier. ............................................................................................................................. U.S. Steel doesn't provide details on which of its products are doing better in the market, but analysts speculated that so-called oil country tubular goods, which are steel pipes used to draw oil from wells, have been strong products for the company. Also, the automotive steel market hasn't fallen as expected, as auto sales have remained buoyant. Analysts said other steel makers, too, are indicating that the steel market may be poised for a turnaround. Nucor Corp., Charlotte, N.C., the nation's second-largest steel maker, said it also has seen prices bottom out in the second quarter and expects better results for the third quarter. Last week, AK Steel Holding Corp. posted better-than-expected results due to better sales in the automotive and appliance markets. AK Steel, Middletown, Ohio, earned $2.7 million, or two cents a diluted share, in the second quarter, compared with profit of $49.1 million, or 44 cents a share, a year earlier. While lower, the latest results beat Wall Street forecasts for a loss of five cents a share. "It is a clear sign that demand is picking up and that a turnaround is coming," says Charles Bradford, steel analyst for Bradford Research Inc.