Add a New Bears Reason

Company: US Steel (X)
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10 votes

  Steel prices could drop as China floods market with cheap still exports

Economic slowdown and steel production increases in China could cause steel prices worldwide to fall as the country becomes a net exporter of steel.

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5 votes

  Decreased demand for steel as industry attempts a rebound

Despite increases in the U.S. steel industry's operating rate from 60% to 73%, the U.S. steel industry will only inch forward at best according to industry leaders. End markets, according to these leaders, are still in poor form as the housing market continues to struggle with a 10% decrease in housing starts for the month of May along with a 32.7% decline in May home sales. Consumers of steel are tentatively watching the economy to see how conditions fair; as such, steel consumption will level off in the meantime.

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11 votes

  A slackening in domestic auto production will hurt steel makers

Weakening production by the Big Three domestic auto makers (Ford, GM and Daimler Chrysler) is a concern for all U.S. steel suppliers. US Steel recently announced on November 13, 2008 that it would be laying off 3% of its employees in the US and Canada (675 people total). The company specifically cited a lack of demand for flat-rolled steel, which is used in auto production among other things.

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3 votes

  Technical analysis suggests that the stock may have trouble going higher.

The RSI (a measure of relative strength among other stocks) has hit a ceiling these past few days and hasn't trended above it, and the PVT seems to be guiding lower which suggests to me that institutional investors are selling shares of X, not buying more. I don't see any reason why absent a high volume breakout above $195, that this stock would be a good purchase.

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