VanEck Steel ETF (SLX)

Three Steel Stocks on the Move BY ART HILL

The Commercial Metals (CMC) chart is a good example of an irregular correction. The stock surged in November-December and then corrected into early February with a 50% retracement. It looked like a normal correction at this point and the breakout in mid-February appeared to end this correction. The breakout, however, failed and the stock fell well below the 61.8% retracement mark in March.



Even though CMC overshot the typical retracements, it is still above the October-November lows and in the gap zone. The stock firmed for several months and then broke out with a surge in mid-June. Even though CMC fell back after the breakout, I view the higher high as bullish and consider the dip back to the 18-18.5 area as a normal throwback. Watch for a second move above 20 to revive the breakout.

The second chart shows Nucor (NUE) with an extended correction that still looks normal (50-61.8% retracement and falling channel/wedge). The 50-day EMA is above the 200-day EMA and NUE is battling to hold the 200-day EMA. The high volume decline in mid-June looks like a selling climax of sorts. Notice that upside volume picked up immediately after this selling climax as the stock rebounded. A break above the mid-June high would be bullish.



The third chart shows Steel Dynamics (STLD) with a long drawn-out correction from mid-December to June. The channel line and June highs mark resistance in the 36-37 area. Look for a breakout here to signal an end to the correction and resumption of the bigger uptrend.

SLX ETF

The Steel ETF (SLX) did get a breakout with a close above resistance from the May-June highs. I suspect that US steel stocks are moving higher because of chatter regarding import duties. Regardless of the funny-mental reason, SLX shows support in the 35-37 area and a breakout at 38. This is enough to reverse the downtrend and suggest at the bigger uptrend is resuming.
BY ART HILL

SLX

Share price is significantly below the MA40 weekly...

For the week that was... -0.65%

Scoreboard for the week: +5.37%

Like all commodities, SLX has been challenged to hold its' gains lately.

An outstanding month of October...

Weakness in the overall markets shows here too.

For the week: -1.62%

-3.06% is the scorecard for the week...

$77.50 is tuff sledding... it'll go in time!

My friends, for the week: +4%!!!

On a significant roll.

All hard assests are climbing... the bottom here in June was buy time!

And it continues...

Action remains right around a rising MA40 weekly...

After a steep correction, a nice bullish engulfing candle appears...

None of that mattered as this has pulled away!

A correction has tested the area of the daily (MA200) and weekly (MA40) support which has held.

China to push iron ore prices up
Updated: 15:15, Tuesday December 22, 2009

http://www2.skynews.com.au/business/article.aspx?id=409505

Iron ore prices are tipped to rise 20 per cent next year, thanks to surging demand from China.

According to a Dow Jones Newswires survey, the the annual contract price for iron ore fines, free on board, from Australia with a 62 per cent ferrous content is forecast to rise to $71.89 a metric ton in 2010.

Despite that forecast, the Chinese industry is already forecasting a tough line in annual contract negotiations.

Macquarie estimates that China's demand should grow to 654 million tonnes next year, making up a significant part of the world's demand of 1 billion tonnes.

Iron ore price unaffordable in 2010

(This should fully explain the triple gains this has made... which will probably continue)

http://www.bloombergutv.com/news/latest-business-news-bricnations/40767/iron-ore-price-unaffordable-in-2010--.html

SHANGHAI: The global steel industry will suffer more losses should iron ore prices increase next year, Baoshan Iron & Steel Co., China's largest steelmaker, said.

"There aren't many profitable steelmakers at present," Shanghai-based Baoshan told the official Xinhua News Agency in an interview posted on the company's Web site. "A further rise in iron ore prices would cause more losses."

Rising steel demand and prices in China, the largest producer, led Macquarie Securities Group to predict a 30% gain in iron ore prices next year. Baosteel's comments underscore the differences to be bridged in annual price talks between steelmakers and the world's three biggest iron ore suppliers BHP Billiton Ltd., Rio Tinto Group and Vale SA.

"There's room for prices of raw materials to rise only when mills can pass on the cost pressures," Baosteel said in the Xinhua interview. "The foundation of Chinese steelmakers' profitability is not solid as the demand is largely created by the government's stimulus policy amid a global crisis."

China's $586 billion stimulus spending has boosted steel demand from automakers, home-appliance manufacturers and builders. That's fueled record imports of iron ore, used to make steel, this year. Baoshan Steel raised benchmark steel prices by 8% for January delivery, the first increase since September, on Dec. 10.

Ship plates

"Demand from the auto and appliance industries has been strong since the second quarter," Baoshan Steel said in the Xinhua story. "We can't meet our clients' needs even at full capacity."

Still, the improving demand and prices for products needed by makers of cars and appliances have been offset by declines in other products, Baoshan Steel said. Ship plates are lossmaking, it said.

Baoshan Steel's comments come as analysts including Deutsche Bank AG forecasts rising steel demand and as cash prices for iron soared. Steel price increases by Baoshan Steel and rivals signal demand growth in China will outpace supply expansion in 2010, Deutsche Bank said.

Weekly cash prices for iron ore imported by China from India gained 5.2%, the biggest gain in six straight weeks, to a record $111.5 a metric ton last week, according to Metal Bulletin. The cash price for Australian ore also reached a record $107.4 a ton as of Dec. 18, according to the Steel Index.

"Cash iron ore prices rose on bets that steel prices will rise over the long term," said Zhu Limin, an analyst with Shanghai Securities Co.

Benchmark Australian iron ore prices were settled at about $61 a ton, excluding freight charges, this year. Shipping the ore to China's Qingdao port from Western Australia would cost about $11.62 a ton, according to the Baltic Dry Index.

Closed over 60 bucks again... we will see how January develops...

Good thinking! Man, this stimulus bill was not weighted enough on infrastructure... very disappointing. I still think 2010 is going to be fruitful.

I added the portfolio capital distribution to the i-Box... still looks solid... of course!!!

89 in no time. I gotta remember to add on the next dip!

The trend is in full force right now...

When the 200MA starts curling up and you still have nice separation with the 50, you know you got a trend.

Long way to go, just hoping economic momentum can continue through the holiday season.

GLTU

This fund is doing well - quite consistent in this uptrend.

Yep... any sustained move supported by the MA50 during the summer (the season called 'sell in May and go away') is a monster!!!

Yeah, SLX isn't doing half bad! Hopefully it can stay that way.

So far, so great...

Steel Yourself For Earnings Season
By Brad Zigler

Zigler discusses the earnings reports for steel and agricultural companies coming out later this week, and what they could mean for SLX, MOO and both industries as a whole.

From Hard Assets Investor (excerpt):

"It's going to be a busy week for earnings watchers. Especially those tracking the agricultural and steel sectors. Iowa's Terra Industries Inc. (NYSE: TRA), a producer of fertilizers and agrichemicals, is expected to announce first-quarter earnings of 43 cents a share Tuesday – about half its year-ago profit.

Analysts have also forecast a 75-cents-per-share loss for Ohio-based AK Steel Holding Corp. (NYSE: AKS) to be announced that same day, a negative 191% year-over-year turnaround.

On Wednesday, Steel Dynamics, Inc. (Nasdaq: STLD)'s numbers are due, followed by a slate of Thursday releases by Potash Corp. of Saskatchewan (NYSE: POT), Bunge Ltd. (NYSE: BG), Reliance Steel & Aluminum Co. (NYSE: RS) and Nucor Corp. (NYSE: NUE).

The late-week reports are expected to show an average 93% decline in year-over-year results, with the steel companies getting the worst of it. The deterioration forecast for the four steel companies noted averages 126%; aggregate earnings for the three agribusinesses are expected to drop 62%.

Year-over-year stock performance pretty much mirrors the earnings disparity. Since April 2008, the Market Vectors Steel ETF (NYSE Arca: SLX), an exchange-traded portfolio tracking the NYSE Arca Steel Index, has swooned 63%; the 44 issues proxied by the Market Vectors Agribusiness ETF (NYSE Arca: MOO) dipped 51%."

Read the full article here: http://www.hardassetsinvestor.com/component/content/article/3/1526-steel-yourself-for-earnings-season.html?Itemid=39

Why Steel ETF Is Showing Renewed Strength
by: Tom Lydon April 19, 2009

After a severe drop in orders last year, steel, along with related its related ETF, may start to pick up as large economies increase consumption.

China, the world’s largest consumer of copper and steel, looks to be recovering and demand for steel is likely to grow, according to Forbes.

During the sudden reversal of economic conditions last year, steel plummeted on reduced orders from automotive, construction and industrial equipment markets.

Prices for steel have been steadily dropping and steel companies are cutting production. Some investors fear higher Chinese export subsidies may cut global steel prices. Outside of China, production has dropped 37% compared to last year, and it has fallen to levels last seen in 1967.

Credit Suisse upgraded the steel sector weighting to overweight from benchmark after citing a recovering China, which accounts for around 35% of global steel demand, reports Donna Kardos for The Wall Street Journal.

* Market Vectors Steel ETF (SLX): up 15.1% year-to-date; up 41.2% in the last month

http://seekingalpha.com/article/131665-why-steel-etf-is-showing-renewed-strength?source=yahoo

US Financial Stocks Up On Durable Goods Orders Report

http://online.wsj.com/article/BT-CO-20090325-709441.html

Good for the steel industry.

Examples of consumer durable goods include cars, appliances, business equipment, electronic equipment, home furnishings and fixtures, houseware and accessories, photographic equipment, recreational goods, sporting goods, toys and games.

I hope it works well for you as lots of volume has come into this...

LOL, no I'm in for a small position at 32.50. If I can flip a few plays I will likely increase my holding. We are at a nice support now, but the next week or two should be very telling.

Still looking??? Nothing exciting here... yet!

I'm looking for a good entry. But I'm figuring I better get in soon.

This sector is on the move now... NICE!!!

For the week, up 27%+... NICE!!!

AKS AK Steel beats by $0.22, reports revs in-line (15.10 )

Reports Q3 (Sep) earnings of $1.67 per share, $0.22 better than the First Call consensus of $1.45; revenues rose 25.3% year/year to $2.16 bln vs the $2.16 bln consensus. Co does not provide Q4 EPS guidance, but says that it expects shipments of about 1.4 mln tons. Raw material and energy costs should be lower in Q4 relative to Q3. Average per-ton selling prices should be about 10% lower in Q4.

The rest of the world needs steel... it will come back -

It might come back stronger than ever...

A close up of the beat down...

Took a starter in SLX here

Longterm - this is in a megatrend... invest accordingly.