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VanEck Steel ETF

VanEck Vectors Steel ETF

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The fund normally invests at least 80% of its total assets in common stocks and depositary receipts of companies involved in the steel sector. Such companies may include small- and medium-capitalization companies and foreign and emerging market issuers. It may concentrate its investments in a particular industry or group of industries to the extent that the Steel Index concentrates in an industry or group of industries. The fund is non-diversified.

Rio Tinto Plc

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Palantir Technologies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PLTR#NYSE">PLTR</a>) shares are trading relatively flat in the <a target="_blank" href="https://www.benzinga.com/premarket" rel="noreferrer noopener">premarket session on Wednesday.</a>
The company announced today that it renewed its multi-year enterprise agreement with the mining giant Rio Tinto Plc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RIO#NYSE">RIO</a>), extending the partnership <a target="_blank" href="https://www.benzinga.com/pressreleases/24/11/b41933059/palantir-and-rio-tinto-renew-enterprise-contract-and-extend-access-to-palantirs-ai-platform" rel="noreferrer noopener">for an additional four years</a>.
This agreement ensures Rio Tinto&#8217;s continued access to Palantir&#8217;s Artificial Intelligence Platform (AIP), further enhancing the company&#8217;s operational efficiency and AI capabilities.
As an early adopter of Palantir Foundry, Rio Tinto has already built a robust digital twin, or &#8220;Ontology,&#8221; which serves as a unified data model for critical operations.
Also Read: <a target="_blank" href="https://www.benzinga.com/markets/equities/24/11/41891026/palantir-overtakes-lockheed-martin-in-market-cap-how-does-the-messi-of-ai-stack-up-against-the-traditional-defense-player" rel="noreferrer noopener">Palantir Overtakes Lockheed Martin In Market Cap, How Does The &#8216;Messi Of AI&#8217; Stack Up Against The Traditional Defense Player</a>
The Ontology enables Rio Tinto to leverage AIP to rapidly develop, test, and deploy AI-driven solutions, addressing challenges in areas like plant operations, geotechnical risk management, and the coordination of unmanned trains.
&#8220;The Foundry Ontology has made our structured data accessible, and AIP is doing the same for our unstructured data while enabling us to attack with pace problems previously deemed too complex,&#8221;&nbsp;said Bold Bataar, Rio Tinto&#8217;s Chief Commercial Officer.
According to&nbsp;<a target="_blank" href="https://pro.benzinga.com/?gspk=YWRhbWVja2VydDUzMzY&amp;gsxid=zBMR4PKmcgBw" rel="noreferrer noopener">Benzinga Pro</a>, RIO stock has lost over 6% in the past year. Investors can gain exposure to the stock via&nbsp;VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>) and&nbsp;Gabelli ETFs Trust Gabelli Financial Services Opportunities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GABF#NYSE">GABF</a>) and VanEck Natural Resources ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HAP#NYSE">HAP</a>).
For instance, in Western Australia&#8217;s Pilbara region, Foundry integrates real-time data from hundreds of systems, allowing operators to optimize the routing of 53 driverless trains transporting iron ore. This has led to improved safety and throughput on the rail network.
Meanwhile, in Mongolia&#8217;s Oyu Tolgoi mine, the Ontology provides dynamic risk management for one of the world&#8217;s most challenging mining environments.
Palantir&#8217;s AIP will enhance Rio Tinto&#8217;s ability to manage complex workflows and accelerate innovation across its operations. Both companies expect the AI platform to drive continued improvements in performance, safety, and decision-making in Rio Tinto&#8217;s high-stakes environments.
Ted Mabrey, Palantir&#8217;s Head of Commercial, highlighted the potential of AIP to address Rio Tinto&#8217;s most pressing challenges, including risk identification and asset management, ensuring safe and efficient AI deployment.
PLTR stock has gained over 200% in the past year. Investors can gain exposure to the stock via REX AI Equity Premium Income ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AIPI#NASDAQ">AIPI</a>) and Global X Funds Global X Defense Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SHLD#NYSE">SHLD</a>).
Price Action: PLTR shares are trading higher by 1.02% to $60.46 premarket at last check Wednesday, whie RIO shares are trading lower by 0.46% to $60.92.
Image via Shutterstock
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What's Going On With Palantir Stock After Renewing Collaboration With Rio Tinto?

Cleveland-Cliffs Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CLF#NYSE">CLF</a>) shares are trading lower on Tuesday following weak third-quarter <a target="_blank" href="https://www.benzinga.com/news/earnings/24/11/41730393/cleveland-cliffs-q3-earnings-revenue-eps-miss-on-weaker-demand-and-pricing-shares-slide" rel="noreferrer noopener">results reported on Tuesday</a>.
The company reported third-quarter revenue of&nbsp;$4.57 billion, versus&nbsp;estimates&nbsp;of $4.77 billion, and adjusted loss per share of $0.33, versus estimates for a loss of $0.27.
Cleveland-Cliffs lowered its capital expenditures outlook for full year 2024 from a range of $650 million to $700 million to a new range of<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener"> $600 million to $650 million</a>.
In the earnings press release, the company said Stelco&#8217;s assets are well-capitalized, and it expects to benefit from the company&#8217;s cost advantages and strong business model on day one. Cleveland-Cliffs noted Stelco&#8217;s business has &#8220;virtually no exposure&#8221; to the automotive sector.&nbsp;
B Riley Securities analyst Lucas N. Pipes says that based on management&#8217;s earlier comments, they previously projected $985 million for 2025 and anticipate insights on the significant reductions.
The analyst adds that Cliffs&#8217; acquisition of Stelco was finalized on November 1, and they are eager to hear management&#8217;s thoughts on the integration process, potential synergies, debt reduction, and product mix.
Also, the analyst anticipates updated insights from management regarding the timeline for the integration process of the Stelco acquisition and the complete realization of the <a target="_blank" href="https://www.benzinga.com/markets/equities/24/07/39770873/cleveland-cliffs-doubles-down-on-steel-with-2-5b-acquisition-expects-120m-in-annual-savings" rel="noreferrer noopener">$120 million in cost synergies</a>.
The analyst maintains the <a href="https://www.benzinga.com/quote/CLF/analyst-ratings">Buy rating and $21 price forecast.</a>
KeyBanc Capital Markets analyst Philip Gibbs writes that Cleveland-Cliffs reported EBITDA of $124 million for the quarter, compared to their estimate of $134 million. The slight shortfall in steel volumes appears to be linked to adjustments in automotive production and inventory.
Investors can gain exposure to the stock via&nbsp;SPDR S&amp;P Metals &amp; Mining ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XME#NYSE">XME</a>) and&nbsp;VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>).
Price Action: CLF shares are down 10.3% at $11.76 at the last check Tuesday.
Read Next:
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<li><a href="https://www.benzinga.com/markets/esg/24/11/41722922/trump-vs-harris-evgo-cleveland-cliffs-plug-power-nucor-brace-for-2024-election-impact" target="_blank" rel="noreferrer noopener">Trump Vs. Harris: EVgo, Cleveland-Cliffs, Plug Power, Nucor Brace For 2024 Election Impact</a></li>
</ul>

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Analyst Ratings

Trading Ideas

Cleveland-Cliffs' Q3 Shortfall Linked To Automotive Adjustments; Analysts Await Stelco Integration Insights

The US asked Group of Seven allies to consider sanctions on Russian palladium and titanium, a person familiar with the matter said, as the Biden administration mulls fresh ways to squeeze President Vladimir Putin's war machine.
<a href="https://www.bloomberg.com/news/articles/2024-10-23/us-asks-g-7-to-consider-sanctions-on-russian-palladium-titanium" title="https://www.bloomberg.com/news/articles/2024-10-23/us-asks-g-7-to-consider-sanctions-on-russian-palladium-titanium">https://www.bloomberg.com/news/articles/2024-10-23/us-asks-g-7-to-consider-sanctions-on-russian-palladium-titanium</a>

PALL

'US Asks G-7 to Consider Sanctions on Russian Palladium, Titanium' - Bloomberg

United States Steel Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/X#NYSE">X</a>) are down over 16% since Wednesday morning after the Biden administration <a href="https://www.benzinga.com/m-a/24/09/40724057/biden-administration-reportedly-warns-nippon-steels-14-9b-acquisition-of-us-steel-poses-national-sec">expressed intentions to block Nippon Steel Corporation</a>'s $14.9-billion acquisition of the American company. 
This has been referred to as a national security concern by President Joe Biden, who is reportedly awaiting the results of a Treasury review that would grant him power to execute the restriction.
The Washington, D.C. holdup of the M&amp;A deal is being called politically motivated by one senior Japanese official, who sees it as a way to earn voters in the battleground state of Pennsylvania, where the company is headquartered.
A former member of the Committee on Foreign Investment, which is the council reviewing national security concerns, says the national security concerns are nowhere to be found, and dropping the deal would actually hurt the economy.
Jefferies maintained a Buy rating on U.S. Steel Thursday and dropped its price target from $47 to $41, according to data from Benzinga Pro.
<h3 class="wp-block-heading">US Steel Deal Not A &#8216;National Security Risk,&#8217; Says Former White House Economist</h3>
The deal would put the Pittsburgh-based steel producer, which is the country's second largest, in the hands of Japan's biggest steelmaker. The acquisition was approved by U.S. Steel shareholders in April. 
U.S. Steel CEO David Burritt has said the company could <a href="https://www.benzinga.com//node/40705949">shut down its steel mills and leave Pittsburgh</a> as its home base if the deal is shut down, which would include the loss of U.S. jobs.
While the issue has become largely politicized in the context of the election year, some pundits disagree with the argument that losing U.S. ownership of the company would signify a national security risk.
"Nothing I see in the public domain makes me think this is a national security risk," said Matthew Slaughter, Dartmouth's Tuck School of Business dean, in an <a href="https://www.youtube.com/watch?v=ClIe2yqNR_E">interview</a> with CNBC.
Slaughter served on the White House Council of Economic Advisers and was part of CIFUS, the body reviewing national security concerns for the Treasury.
Japan is one of the U.S.'s strongest allies and Nippon Steel has been operating in the country since the 1980s, Slaughter said. Nippon Steel has expressed that it would keep U.S. management on the payroll making key decisions in order to accommodate the deal.
The Japanese steel behemoth has committed to a $2.7-billion investment in U.S. Steel, most of which the company needs to continue its operations and realize further expansions.
"Essential to national security is economic security," said Slaughter, who argues the deal should go through.
It has long been the case that engagement with the global economy through these types of foreign investments "has been a major contributor to the economic strength and dynamism of America," he said.
This dynamism ultimately feeds into the "good jobs that everyone seems to be rightly concerned about,&#8221; Slaughter said. 
"We've got to find mechanisms other than building more walls, to address those legitimate concerns," he said.
In his view, the Nippon-U.S. Steel deal looks "quite unlikely." 
Read Also: <a href="https://www.benzinga.com//node/40737312">S&amp;P 500 Falls Below 5,500 Points On Cooling Jobs Data, Tesla Leads Tech Gains, Natural Gas Spikes: What&#8217;s Driving Markets Thursday?</a>
<h3 class="wp-block-heading">Are Politics Behind Biden's Decision?</h3>
Both presidential nominees — Kamala Harris and Donald Trump — have said they believe U.S. Steel should remain U.S.-owned.
The company is headquartered in the battleground state of Pennsylvania, where Harris and Trump are tied in the polls. 
The United Steelworkers union has expressed opposition to the deal, Reuters reported in April.&nbsp;
U.S. Steel workers don't necessarily agree. Hundreds of employees rallied at the U.S. Steel Tower in Pittsburgh to support the Nippon Steel transaction, WTAE-TV Pittsburgh <a href="https://www.youtube.com/watch?v=Vtk2TVcf1LU">reported</a>.
Speaking to reporters in North Carolina on Thursday, Treasury Secretary Janet Yellen said the final decision on foreign acquisitions remains with Biden, and declined further comment, Reuters reports.
Japan's Digital Transformation Minister Taro Kono referred to the blockade as politically motivated.
"I think they're looking for labor union votes ahead of the U.S. presidential race," he said on Thursday.
Kono could soon become Japan's new prime minister as he runs to replace PM Fumio Kishida as his party's leader in elections next month.
The government shouldn't "arbitrarily intervene in a single case," he said, as <a href="https://www.japantimes.co.jp/business/2024/09/05/companies/us-steel-deal-nixed/">quoted</a> by The Japan Times.
Investors were warded off by news of the blockade, resulting in a sell-off of U.S. Steel stock.
Analysts at Jefferies continue to see value in the stock. While the price target was reduced to $41, analyst Christopher LeFemina said he expects a premium of almost 40% in the year stemming from today's sell-off.
The VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>) rose 0.2% on Thursday and is down 5% in the last five trading days.
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<li><a href="https://www.benzinga.com//node/40726873">Asia And Europe Markets Mixed; Oil Stays Below $70, Dollar Retreats &#8211; Global Markets Today While US Slept</a></li>
</ul>
Image courtesy of U.S. Steel.

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Biden's Expected Veto Of US Steel Deal Is Hunt For 'Labor Union Votes,' Says Top Japan Official

Rio Tinto Group (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RIO#NYSE">RIO</a>) shares are trading higher today. The company inked a global cooperation agreement with construction equipment manufacturer XCMG Machinery for over $<a href="https://www.prnewswire.com/news-releases/xcmg-and-rio-tinto-forge-new-partnership-for-world-class-simandou-iron-ore-project-302227445.html" target="_blank" rel="noreferrer noopener">110</a> million.
The deal includes the supply of essential mining equipment for the Simandou iron ore project in Guinea, a notable untapped high-grade iron ore reserve.
Located in southeastern Guinea, Simandou holds some of the highest-grade iron ore globally, making it crucial in international mineral markets.
The contract covers over 34 units of 230-ton mining trucks, large mining graders with 350 and 550 horsepower, ancillary equipment, and large production loaders and excavators.
Liu Jiansen, Vice President of XCMG Machinery, said, &#8220;This marks a new beginning of high-level friendly cooperation between XCMG and Rio Tinto and further demonstrates our leading technology and innovation capabilities in the field of heavy mining equipment.&#8221;
Aboubacar Koulibaly, Head of Rio Tinto Guinée, stated, &#8220;The Simandou project can be a key driver of growth in Guinea – catalyzing a new wave of investment, building the country&#8217;s entrepreneurial fabric and supporting development across the country.&#8221;
In July, Rio Tinto reported a 2% Y/Y decrease in iron ore production to 79.5 million tonnes (67.5 million tonnes for Rio Tinto)<a href="https://www.benzinga.com/markets/equities/24/07/39798491/why-rio-tinto-shares-are-diving-today" target="_blank" rel="noreferrer noopener"> due to a mid-May train collision</a>. Rio Tinto reiterated its full year outlook for production at Pilbara Iron ore<a href="https://www.benzinga.com/calendars/guidance" target="_blank" rel="noreferrer noopener"> of 323 to 338 million tonnes</a>.
Investors can gain exposure to the stock via&nbsp;VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>) and&nbsp;NEOS ETF Trust Mast Global Battery Recycling &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EV#NYSE">EV</a>).
Price Action: RIO shares are up 1.97% at $63.22 at the last check Wednesday.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Large Cap

Rio Tinto And XCMG Team Up In $110M Equipment Deal For Guinea's Iron Treasure: Details

Nucor Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NUE#NYSE">NUE</a>) shares are trading lower today. Yesterday, the company reported better-than-expected&nbsp;<a target="_blank" href="https://www.benzinga.com/news/earnings/24/07/39894662/nucor-shares-climb-following-q2-results-what-to-know" rel="noreferrer noopener">second-quarter financial results</a>.
Nucor reported quarterly earnings of $2.68 per share, which beat the analyst consensus estimate of $2.35 by 14.04%. Quarterly sales came in at $8.08 billion, which beat the analyst <a target="_blank" href="https://www.benzinga.com/markets/equities/24/06/39335851/whats-going-on-with-nucor-corp-stock-on-friday" rel="noreferrer noopener">consensus estimate of $7.69 billion by 5.13%</a>.
Nucor anticipates a decline in third-quarter 2024 earnings compared to the second quarter, primarily due to lower average selling prices <a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">impacting the steel mills segment</a>.
KeyBanc Capital Markets analyst Philip Gibbs says that 3Q24 guidance suggests weaker earnings in Steel Products and <a target="_blank" href="https://www.benzinga.com/quote/nue/analyst-ratings" rel="noreferrer noopener">Raw Materials than his current model</a>.
The analyst notes that NUE&#8217;s average realized carbon sheet pricing/mix in 2024 remained above $1,000/t, compared to the current HRC spot price of ~$650/t and tandem product base prices of ~$875-$975/t (with NUE&#8217;s mix being roughly 50% HRC).
The analyst writes that this suggests NUE was shipping from a strong backlog. Additionally, the average realized plate pricing/mix exceeded $1,300/t, while the current baseline index pricing is $1,000-$1,050/t.
Investors can gain exposure to the stock via&nbsp;VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>)&nbsp;and Carbon Collective Climate Solutions U.S. Equity ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CCSO#NASDAQ">CCSO</a>).
Price Action: NUE shares are down 0.97% at $161.75 at the last check Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image: Courtesy of Nucor Corporation

CCSO

Nucor's Q2 Earnings Beat Expectations, But Analyst Warns of Weaker Q3 Due to Lower Steel Prices

Cleveland-Cliffs Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CLF#NYSE">CLF</a>) shares are trading higher today after the company reported financial results <a target="_blank" href="https://www.benzinga.com/news/earnings/24/07/39893870/cleveland-cliffs-reports-mixed-q2-earnings-investors-focus-on-strong-free-cash-flow-generation-cont" rel="noreferrer noopener">for the second quarter yesterday</a>.
The company reported revenue of $5.09 billion, missing the&nbsp;consensus estimate of $5.20 billion, according to&nbsp;<a target="_blank" href="https://benzinga.grsm.io/gxjhpowx7zks" rel="noreferrer noopener">Benzinga Pro</a>. The company reported breakeven adjusted earnings, beating analyst estimates for a loss of 2 cents per share.
Cleveland-Cliffs lowered its full-year 2024 expected capital expenditures range from a range of $675 million&nbsp;to&nbsp;$725 million to a new range of <a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">$650&nbsp;million to&nbsp;$700 million</a>.
The company also noted that its year-over-year steel unit cost reduction objective of approximately&nbsp;$30&nbsp;per net ton remains on track.
KeyBanc Capital Markets analyst Philip Gibbs writes that Steel volumes of ~4.0Mt matched their model, but pricing/mix exceeded expectations by $9/ton or <a target="_blank" href="https://www.benzinga.com/quote/Clf/analyst-ratings" rel="noreferrer noopener">$35 million (down ~$50/t q/q)</a>.
He further adds that core SG&amp;A/opex was notably low at ~$103 million (+$47 million vs. their model), decreasing $29 million q/q and $46 million y/y.
Last week, Cleveland-Cliffs entered into a definitive agreement to acquire&nbsp;Stelco Holdings Inc. (OTC:<a class="ticker" href="https://www.benzinga.com/stock/STZHF#OTC">STZHF</a>) for a total enterprise&nbsp;value of <a target="_blank" href="https://www.benzinga.com/markets/equities/24/07/39770873/cleveland-cliffs-doubles-down-on-steel-with-2-5b-acquisition-expects-120m-in-annual-savings" rel="noreferrer noopener">around&nbsp;$2.5 billion (CAD3.4 billion)</a>.
The deal is expected to boost CLF&#8217;s EPS for 2024 and 2025, with $120 million in annual cost savings anticipated.
Investors can gain exposure to the stock via&nbsp;SPDR S&amp;P Metals &amp; Mining ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XME#NYSE">XME</a>) and&nbsp;VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>).
Price Action: CLF shares are up 4% at $15.82 at the last check Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by christopher-burns- for Unsplash

STZHF

What's Going On With Cleveland-Cliffs Shares Today?

Rio Tinto Group&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RIO#NYSE">RIO</a>) shares are trading lower today after the company disclosed <a target="_blank" href="https://www.riotinto.com/en/invest/financial-news-performance/production" rel="noreferrer noopener">second</a>-quarter production results.
The company reported production of 79.5 million tonnes (67.5 million tonnes for Rio Tinto), a decrease of 2% Y/Y, attributed to a mid-May train collision that disrupted rail capacity for about six days and led to full stockpiles at some mines.
Bauxite production increased to 14.7 million tonnes, up 9% from last year, driven by improved utilization and feed rates at Weipa, aligning with the company&#8217;s full-year guidance <a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">to the upper end of 53 to 56 million tonnes.</a>
Outlook: Rio Tinto reiterated outlook for production at Pilbara Iron ore of 323 to 338 million tonnes.
Rio Tinto Chief Executive Jakob Stausholm said: &#8220;Our operational performance continues to progress. While there are still significant improvements ahead, we are beginning to see a step-change in production, including from our Queensland bauxite business following the roll-out of the Safe Production System.&#8221;
Read: <a target="_blank" href="https://www.benzinga.com/markets/equities/24/07/39590764/rio-tinto-scrambles-to-avoid-repeat-strike-at-mongolian-mine-report" rel="noreferrer noopener">Rio Tinto Scrambles to Avoid Repeat Strike at Mongolian Mine: Report</a>
&#8220;We continue to prioritise the decarbonisation of our business, announcing the installation of carbon free aluminium smelting cells using ELYSIS technology at our Arvida smelter in Quebec and an investment in a R&amp;D facility to test our low-carbon ironmaking process, BioIron, in Western Australia. We also signed 20-year electricity arrangements backed by renewable electricity to secure the future of the Tiwai Point aluminium smelter in New Zealand.&#8221;
Also Read: <a target="_blank" href="https://www.benzinga.com/markets/equities/24/07/39769271/australias-ngarluma-country-shines-bright-solar-project-aims-to-slash-rio-tintos-co2-footprint" rel="noreferrer noopener">Australia&#8217;s Ngarluma Country Shines Bright: Solar Project Aims to Slash Rio Tinto&#8217;s CO2 Footprint</a>
Investors can gain exposure to the stock via&nbsp;VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>) and&nbsp;NEOS ETF Trust Mast Global Battery Recycling &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EV#NYSE">EV</a>).
Price Action: RIO shares are down 2.4% at $65.92 at the last check Tuesday.
Photo via Shutterstock

Guidance

Why Rio Tinto Shares Are Diving Today?

Rio Tinto Group&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RIO#NYSE">RIO</a>) and Ngarluma Aboriginal Corporation (NAC) have agreed to jointly develop an 80MW solar farm on Ngarluma Country near <a target="_blank" href="https://www.riotinto.com/en/news/releases/2024/ngarluma-and-rio-tinto-to-progress-renewable-energy-project" rel="noreferrer noopener">Karratha</a>.
The solar farm is the first project the Ngarluma people and Rio Tinto will pursue following a memorandum of understanding to explore renewable energy opportunities on Ngarluma Country.
The project, adjacent to Rio Tinto&#8217;s Yurralyi Maya Power Station near Karratha, could displace up to 11% of natural gas used for generation, reducing Rio Tinto&#8217;s emissions by up to 120kT CO2e annually.
This project aims to supply renewable energy to Rio Tinto&#8217;s iron ore operations in the Pilbara region of Western Australia.
The company expects the feasibility study by early 2025, with commissioning planned for 2027, pending approvals and final investment decision.
By 2030, Rio Tinto aims to deploy 600MW to 700MW of renewable energy to largely replace gas in its Pilbara power network, with additional capacity needed for future fleet electrification.
Read: <a target="_blank" href="https://www.benzinga.com/news/large-cap/24/06/39155495/rio-tinto-invests-143m-in-low-emission-steel-research-and-development" rel="noreferrer noopener">Rio Tinto Invests $143M in Low-Emission Steel Research And Development</a>
Ngarluma Aboriginal Corporation CEO Ljuba Mojovic said, &#8220;We&#8217;re fortunate to embark on our first renewable energy project with Rio Tinto to reduce emissions and to create economic opportunities for the Ngarluma People.&#8221;
&#8220;The Solar farm project will enable NAC to realise sustainable revenues, increase contracting opportunities and contribute to a positive environmental impact in the Pilbara.&#8221;
Earlier this month, Rio Tinto stated that it reportedly&nbsp;is&nbsp;in negotiations with workers at its Oyu Tolgoi copper operations in Mongolia to <a target="_blank" href="https://www.benzinga.com/markets/equities/24/07/39590764/rio-tinto-scrambles-to-avoid-repeat-strike-at-mongolian-mine-report" rel="noreferrer noopener">prevent further industrial action</a>.
Investors can gain exposure to the stock via&nbsp;VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>) and&nbsp;NEOS ETF Trust Mast Global Battery Recycling &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EV#NYSE">EV</a>).
Also Read:<a target="_blank" href="https://www.benzinga.com/news/large-cap/24/06/39357247/rio-tinto-to-initiate-largest-european-lithium-project-by-2028" rel="noreferrer noopener">&nbsp;</a><a target="_blank" href="https://www.benzinga.com/news/large-cap/24/06/39357247/rio-tinto-to-initiate-largest-european-lithium-project-by-2028" rel="noreferrer noopener">Rio Tinto To Initiate Largest European Lithium Project By 2028</a>
Price Action: RIO shares are trading lower by 0.86% at $67.93 premarket at the last check Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock

Australia's Ngarluma Country Shines Bright: Solar Project Aims to Slash Rio Tinto's CO2 Footprint

Rio Tinto Group (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RIO#NYSE">RIO</a>) is reportedly in negotiations with workers at its Oyu Tolgoi copper operations in Mongolia to prevent further industrial action.
The move follows a previous strike in May, prompted by a significant wage reduction, reported Reuters.
Notably, changes to Mongolia&#8217;s Labor Law, effective from the beginning of 2022, led Rio Tinto to recalculate employee allowances.
According to the non-governmental organization OT Watch, which is in contact with the mine workers, wages have decreased by up to 80%.
OT Watch Director Sukhgerel Dugersuren told Reuters, &#8220;A request to start negotiations was sent and OT is to reply by July 5, 2024. Another strike is possible if 70% of key demands on wages and 50% of other demands are not met.&#8221;
&#8220;The key demand of workers is to bring wages to similar levels paid for the same type of work performed in other Rio Tinto mines.&#8221;
He added that the workers were being paid a &#8220;miserable $1,596 per month for work far from home&#8221;. According to government data, the average monthly mining salary in Australia is A$10,413 ($6,919), which the report highlighted.
According to OT Watch, during the strike from May 10-17, all open pit and underground mining operations were halted. Workers reported that this stoppage may have caused some structural issues underground.
Rio Tinto commented that, &#8220;The stand-down did not affect mine operations and there was no material impact to mine production.&#8221;
Also Read: <a href="https://www.benzinga.com/news/large-cap/24/06/39155495/rio-tinto-invests-143m-in-low-emission-steel-research-and-development" target="_blank" rel="noreferrer noopener">Rio Tinto Invests $143M in Low-Emission Steel Research And Development</a>
In March last year, Rio Tinto began underground operations at Oyu Tolgoi and scaling up production to reach approximately 500,000 tons of copper annually starting in 2028.
Last month, Rio Tinto stated that Serbia is poised to approve the development of Europe&#8217;s largest lithium mine. The Jadar project, suspended in 2022, could start production by 2028, providing Europe with metal much needed for its&nbsp;<a target="_blank" href="https://www.benzinga.com/news/large-cap/24/06/39357247/rio-tinto-to-initiate-largest-european-lithium-project-by-2028" rel="noreferrer noopener">electric vehicle (EV) industry</a>.
Investors can gain exposure to the stock via VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>) and NEOS ETF Trust Mast Global Battery Recycling &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EV#NYSE">EV</a>).
Price Action: RIO shares closed higher by 0.73% at $66.41 on Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock
Read Next:
<ul>
<li><a href="https://www.benzinga.com/markets/equities/24/05/39037153/mining-rivals-join-forces-rio-tinto-bhp-partner-on-electric-truck-trials" target="_blank" rel="noreferrer noopener">Mining Rivals Join Forces: Rio Tinto &amp; BHP Partner On Electric Truck Trials</a></li>
</ul>

Media

Rio Tinto Scrambles to Avoid Repeat Strike at Mongolian Mine: Report

Commercial Metals Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CMC#NYSE">CMC</a>) shares are trading higher after the company reported third-quarter FY24 net sales of $2.078 billion,&nbsp;beating <a target="_blank" href="https://www.benzinga.com/pressreleases/24/06/n39407376/cmc-reports-third-quarter-fiscal-2024-results" rel="noreferrer noopener">the consensus of $2.034 billion</a>.
The company stated that fundamentals remain strong in North American markets, supporting stable to modestly improving steel product margins, healthy shipment levels, and steady downstream backlog volumes.
Commercial Metals reported that the Europe Steel Group achieved nearly breakeven performance on an adjusted EBITDA basis in the third quarter. Market conditions remained stable compared to the previous quarter, with slight increases in finished steel pricing and product margins.
The Europe Steel Group&#8217;s average selling price increased by $8 per ton from the second quarter of fiscal 2024.
Core EBITDA decreased to&nbsp;$256.1 million from $384.5 million in the prior year quarter, with a core EBITDA margin of 12.3%.
Adjusted EPS was $1.02,<a target="_blank" href="https://www.benzinga.com/calendars/earnings" rel="noreferrer noopener"> which is in line with the consensus.</a>
As of February 29, 2024, cash and cash equivalents totaled $698.3 million, with available liquidity of about&nbsp;$1.5 billion.
The company&#8217;s net cash flows from operating activities for the first nine months totaled $547.9 million.
In the quarter, CMC repurchased stock worth $51.8 million. As of May-end, $458.6 million shares remained available under the current share repurchase authorization.
Dividend: On June 19, 2024, the board declared a quarterly dividend of $0.18 per share (+13% Y/Y), payable on July 10, to <a target="_blank" href="https://www.benzinga.com/pressreleases/24/06/n39397675/cmc-announces-quarterly-dividend-of-0-18-per-share" rel="noreferrer noopener">stockholders of record on July 1</a>.
Peter Matt, President and Chief Executive Officer, stated, &#8220;We expect consolidated financial results in our fiscal fourth quarter to be consistent with third quarter levels.  Finished steel shipments within the North America Steel Group are anticipated to be flat on a sequential basis, while adjusted EBITDA margin should remain relatively stable.&#8221;
&#8220;Adjusted EBITDA for our Europe Steel Group is likely to continue the quarter-to-quarter improvement trend despite market conditions that are expected to remain challenging.  Financial results for the Emerging Businesses Group should improve modestly, driven by steady underlying market <a href="https://www.benzinga.com/calendars/guidance" target="_blank" rel="noreferrer noopener">fundamentals and a healthy order book</a>.&#8221;
Investors can gain exposure to the stock via VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>) and SPDR S&amp;P Metals &amp; Mining ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XME#NYSE">XME</a>).
Price Action: CMC shares are up 5.85% at $53.71 at the last check Thursday.

Earnings

Mid Cap

Why Commercial Metals Shares Are Surging Today

Nucor Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NUE#NYSE">NUE</a>) shares are trading lower after the company inked a deal to acquire Rytec Corporation in&nbsp;an <a target="_blank" href="https://www.benzinga.com//node/39136535" rel="noreferrer noopener">all-cash transaction valued at&nbsp;$565 million.</a>
The acquisition price equates to around 12.5 times Rytec&#8217;s estimated 2024 EBITDA.
Rytec manufactures high-speed Spiral rigid doors for various industries and durable fabric doors for specialized applications. The company prioritizes product development, investing heavily in technology and automation to boost quality, efficiency, and safety.
Rytec&nbsp;has over 300 teammates operating out of two manufacturing facilities in&nbsp;Wisconsin.
Leon Topalian, Chair, President and Chief Executive Officer of Nucor, said, &#8220;Rytec is a leader in high-performance commercial doors and serves several growing end-user markets. This acquisition further executes our strategy to expand beyond our core steelmaking businesses into related downstream businesses.&#8221;
&#8220;Adding high-performance doors will create cross-selling opportunities with other Nucor businesses and greatly expand Nucor&#8217;s product portfolio serving the commercial arena.&#8221;
At the end of the first quarter of 2024, Nucor had $5.54 billion in cash, cash equivalents,<a target="_blank" href="https://www.benzinga.com/pressreleases/24/04/n38365379/nucor-reports-results-for-the-first-quarter-of-2024" rel="noreferrer noopener"> short-term investments, and restricted cash on hand</a>.
Investors can gain exposure to the stock via VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>) and Litman Gregory Funds Trust IMGP Berkshire Dividend Growth ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BDVG#NYSE">BDVG</a>).
Price Action: NUE shares are down 2.04% at $165.40 at the last check Monday.
Photo: Janno Nivergall from Pixabay

BDVG

Nucor Expands Beyond Steelmaking With Acquisition Of Rytec: Details

United States Steel Corporation&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/X#NYSE">X</a>) inked a definitive agreement to capture carbon emissions generated from the company&#8217;s Gary Works Blast Furnaces in<a target="_blank" href="https://www.benzinga.com/pressreleases/24/04/b38065033/u-s-steel-and-carbonfree-sign-definitive-agreement-to-capture-carbon-dioxide-emissions-at-one-of-t" rel="noreferrer noopener">&nbsp;a first-of-its-kind project.</a>
The initiative employing CarbonFree&#8217;s SkyCycle technology aims to capture and mineralize 50,000 metric tons of carbon dioxide yearly, akin to emissions from 12,000 cars, with potential for expansion.
U.S. Steel&#8217;s participation supports its targets of cutting greenhouse gas intensity by 20% by 2030 and achieving net-zero emissions by 2050.&nbsp;
The SkyCycle project meets rising demand for low-emission products like verdeX steel, serving as an initial step in evaluating technology scalability for broader enterprise adoption.
Construction for the SkyCycle plant at U.S. Steel Gary Works is set to start as soon as summer 2024, targeting operational launch in 2026.&nbsp;
The agreement spans 20 years post its in-service date.
&#8220;Innovating to capture carbon at an integrated mill is the latest example of how steel is enabling a more sustainable future,&#8221; said Scott Buckiso, Senior Vice President &amp; Chief Manufacturing Officer, U. S. Steel. &#8220;Moreover, U. S. Steel has a history of &#8216;firsts&#8217; that we&#8217;re confidently building on. Using SkyCycle technology for the first project of its kind in North America should benefit the community for generations to come,&#8221; Buckiso adds.
Investors can gain exposure to the stock via&nbsp;VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>) and&nbsp;First Trust Materials AlphaDEX Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXZ#NYSE">FXZ</a>).
Price Action: X shares are trading higher by 0.05% to $41.42 premarket on the last check Wednesday. 
Photo by Dennis Diatel on Shutterstock

US Steel And CarbonFree Forge Path For Carbon Capture Innovation At Gary Works Blast Furnaces

Iron ore prices were boosted by hopes of an industrial recovery in China following data that showed improving activity in the country&#8217;s manufacturing sector.
Singapore iron ore 58% futures rose 3.8% on Monday, reversing earlier losses that took the prices nearly 4% lower, while futures on the Dalian exchange in China ended 3.8% higher. However, iron ore futures on the Chicago Mercantile Exchange (CME) fell 0.3%. 
The catalyst for the gains in Asia appeared to be data from the latest purchasing manager index (PMI) survey on <a href="https://www.benzinga.com/markets/asia/24/04/38021682/chinas-march-manufacturing-growth-could-dump-into-global-markets-thus-triggering-deflation-expert-wa">China&#8217;s manufacturing sector</a> that showed further improvement in economic activity during the first quarter.
This was driven by greater inflows of new work, including from overseas, which helped increase production and levels of purchasing of raw materials. The March Caixin PMI rose to 51.1, up from 50.9 in the previous month, and marked the fifth-successive monthly improvement.
Dr. Wang Zhe, senior economist at Caixin Insight Group, said: &#8220;Overall, the manufacturing sector continued to improve in March, with expansion in supply and demand accelerating, and overseas demand picking up. 
&#8220;Manufacturers increased purchases and raw material inventories amid continued improvement in business optimism.&#8221;
Also Read: <a href="https://www.benzinga.com/markets/asia/24/04/38021682/chinas-march-manufacturing-growth-could-dump-into-global-markets-thus-triggering-deflation-expert-wa">China&#8217;s March Manufacturing Growth Could &#8216;Dump Into Global Markets, Thus Triggering Deflation&#8217;</a>
<h1 class="wp-block-heading">Construction: Thorn In The Side For Steel Producers</h1>
That said, construction — a key industry for the demand dynamics of steel products — remains subdued, with China still facing a sharp slowdown in the property sector.
Meanwhile, the inventory of steel in Chinese ports was at its highest level in more than a year, according to <a href="https://www.bloomberg.com/news/articles/2024-04-01/iron-ore-sinks-to-10-month-low-on-gloom-over-china-construction?srnd=homepage-americas&amp;sref=TBDibEcD">data</a> by Bloomberg, with around 143 tons in reserve.
This was reflected by the sharp losses seen for iron ore in recent months. Singapore futures were down 20% since the start of 2024, while CME futures were down 19.7% since the start of the year.
This was also knocked-on to the iron ore miners and steel refiners, and the exchange-traded funds that hold their stocks.
The VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>), was up 0.4% on Monday but is down 1.3% in 2024. Its top two holdings are Rio Tinto (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RIO#NYSE">RIO</a>) and Vale (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VALE#NYSE">VALE</a>). Rio was up 0.7% on Monday, but remained 13.8% lower in 2024, while Vale fell 0.9% on Monday, and was down 24% on the year.
The broader SPDR S&amp;P Metals &amp; Mining ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XME#NYSE">XME</a>) was up 0.9% on Monday and up 1.23 in 2024. Its top two holdings are Freeport McMoRan Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FCX#NYSE">FCX</a>) and Steel Dynamics Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/STLD#NASDAQ">STLD</a>). 
Freeport specializes in copper and gold, which — <a href="https://www.benzinga.com/topic/gold">particularly gold</a> — have performed relatively well this year, was up 1.3% on Monday and is up 11.7% in 2024. Steel Dynamics was up 1.2% on Monday and is up 27 on the year.
Read Now: <a href="https://www.benzinga.com/markets/equities/24/04/38025851/turkish-stock-markets-welcome-change-will-erdo-an-defeat-prompt-economic-reforms">Turkish Stock Markets Welcome Change: Will Erdoğan Defeat Prompt Economic Reforms?</a>
Photo: Shutterstock

Sector ETFs

Global

Economics

ETFs

STLD

VALE

Miners Cheer As China's Manufacturers Continue To Increase Pace

The U.S. and the EU are on the verge of a groundbreaking partnership aimed at countering <a href="https://www.benzinga.com/topic/steel">China&#8217;s burgeoning steel surplus.</a>
This audacious move not only seeks to curb excess steel production, but also aims to bury the hatchet on a long-standing trade dispute that traces its roots back to the Trump administration.
<h2 class="wp-block-heading">Taking on China&#8217;s Steel Overproduction</h2>
At the heart of this agreement lies the intent to introduce fresh tariffs, primarily targeting imports from China that have thrived due to non-market practices, as Bloomberg reported <a href="https://www.bloomberg.com/news/articles/2023-09-07/eu-us-plan-new-tariffs-on-china-steel-in-bid-to-end-trump-era-trade-conflict?sref=TBDibEcD">Thursday</a>. 
Negotiations are still underway. Crucial details such as the scope of these tariffs and potential targets in other countries were not immediately unclear.
Furthermore, this accord is designed to set a framework that invites other nations to join in the future, potentially reshaping the landscape of global steel trade.
This new pact is an integral part of the broader Global Arrangement on Sustainable Steel and Aluminum, a negotiation that commenced in 2021 between the EU and the Biden administration. This negotiation aims to settle a dispute that first flared up when former President Donald Trump imposed tariffs on metal imports from Europe, citing national security concerns.
<h2 class="wp-block-heading">Steelmakers Rallied in 2023</h2>
The most widely recognized exchange-traded fund (ETF) focusing on stocks from various sectors, including materials, metals, and mining, particularly steel, is the VanEck Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>).
Over the past year, this fund has displayed impressive performance, delivering a remarkable 35% return, with a significant 16% increase year-to-date. The standout contributor to this outstanding performance has been POSCO Holdings Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PKX#NYSE">PKX</a>), which has surged by more than 100% year-to-date.
Within the realm of U.S. steel producers, notable performances have been observed. U.S. Steel Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/X#NYSE">X</a>) has seen a robust increase of 22% year-to-date, while Nucor Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NUE#NYSE">NUE</a>) has posted a substantial gain of 28% in the same period. Reliance Steel &amp; Aluminum Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RS#NYSE">RS</a>) has outperformed with an impressive 32% year-to-date growth.
<h2 class="wp-block-heading">Current Tariffs and Potential Implications</h2>
Since 2018, the U.S. has imposed a 25% tariff on steel imports, with the EU implementing a similar duty on a range of steel imports under its safeguard measures. 
In 2021, both sides temporarily suspended punitive measures on each other&#8217;s goods, setting a deadline for finding a permanent solution by Oct. 31, 2023. 
Failure to reach an agreement would automatically resurrect Trump-era tariffs and EU retaliatory measures, impacting over $10 billion in exports.
<h2 class="wp-block-heading">What Lies Ahead</h2>
Talks regarding the Global Sustainable Agreement aim to prepare for a US-EU summit slated for late October, offering hope for a mutually beneficial understanding.
This could have significant implications for Chinese steelmakers, who have been increasing their exports due to weak domestic demand and a depreciating yuan, making their exports more attractive.
Read Now: <a href="https://www.benzinga.com/news/earnings/23/09/34312933/s-p-500-nasdaq-futures-point-to-another-gloomy-start-amid-rate-hike-worries-but-one-analyst-still-s">S&amp;P 500, Nasdaq Futures Point to Another Gloomy Start Amid Rate-Hike Worries — But One Analyst Still Sees A Rosy 2024</a>
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. 
Photo: Shutterstock

Macro Economic Events

Eurozone

Econ #s

US, EU Join Forces To Tackle China's Steel Surplus, Reshaping Trump-Era Tariffs

The World Trade Organization (WTO) ruled China overstepped its trade agreements by imposing tariffs on <a href="https://www.benzinga.com/topic/us-china-trade-war">$2.4 billion of U.S. goods. </a>
On Wednesday, a trio of WTO specialists concurred with the U.S., stating China&#8217;s tariffs breached the organization&#8217;s &#8220;most favored nation&#8221; principle. This principle mandates the WTO&#8217;s 164 members to treat each other impartially or offer trade concessions as compensation, as <a href="https://www.bloomberg.com/news/articles/2023-08-16/wto-rejects-china-s-trump-era-2018-tariffs-against-us-exports?utm_source=google&amp;utm_medium=bd&amp;cmpId=google&amp;sref=TBDibEcD">Bloomberg reported. </a>
The dispute dates back to the Trump administration&#8217;s tariffs on steel and aluminum when the U.S. introduced a 25% tariff on worldwide steel imports and a 10% tariff on aluminum, aimed to counter the surge of inexpensive metals from China. In retaliation, China levied tariffs on various U.S. imports, including aluminum waste, pork and certain fruits.
See Also: <a href="https://www.benzinga.com/markets/asia/23/08/33875989/chinas-real-estate-crisis-echoes-lehman-moment-country-garden-warns-of-major-uncertainties-as-bond-r">China&#8217;s Real Estate Crisis Echoes Lehman Moment; Country Garden Warns Of &#8216;Major Uncertainties&#8217; As Bond Redemption Looms</a>
<h2 class="wp-block-heading">Biden Administration Lauds The WTO&#8217;s Ruling</h2>
Expressing satisfaction with the WTO&#8217;s decision, the Biden administration pointed out China&#8217;s contradictory stance. 
&#8220;China's decision to pursue this dispute highlights its hypocrisy by both suing the United States in the WTO and at the same time unilaterally retaliating with tariffs,&#8221; remarked U.S. Trade Representative spokesperson Sam Michel.
Both nations have a 60-day window to appeal the decision. If China chooses to appeal, it would effectively be a veto, given the WTO appellate body&#8217;s inactivity since 2019. 
The U.S. criticized China for not addressing its excessive steel and aluminum production, which has been a significant concern globally. The Biden administration emphasized its dedication to defending U.S. workers and promoting a balanced, worker-focused trade system.
Both United States Steel Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/X#NYSE">X</a>) and the VanEck Vectors Steel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLX#NYSE">SLX</a>) surged 0.6% on Wednesday. 
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Shutterstock
Read Now: <a href="https://www.benzinga.com/news/23/08/33871059/us-should-account-that-xi-jinping-is-mortal-and-not-going-to-control-china-forever-says-former-white">US Should Account That Xi Jinping Is &#8216;Mortal&#8217; And Not Going To Control China Forever, Says Former White House Adviser</a>

US Triumphs As WTO Rules Against China's Retaliatory Tariffs Under Trump's Era

U.S. steel prices have skyrocketed in 2021, and steel stocks have mostly followed suit.
One major Wall Street firm adjusted its coverage of steel stocks on Wednesday ahead of an anticipated correction in the steel market in the months ahead.
The Steel Analyst:
Goldman Sachs analyst Emily Chieng made the following adjustments to her steel stock coverage:
<ul>
<li>United States Steel Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/x#NYSE">X</a>) downgraded from Neutral to Sell, price target cut from $34 to $21.</li>
<li>Nucor Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nue#NYSE">NUE</a>) downgraded from Buy to Neutral, price target cut from $123 to $108.</li>
<li>Commercial Metals Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cmc#NYSE">CMC</a>) upgraded from Sell to Neutral, price target raised from $31 to $33.</li>
<li>Cleveland-Cliffs Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/clf#NYSE">CLF</a>) upgraded from Neutral to Buy, price target cut from $26 to $24.</li>
</ul>
Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/21/09/23158609/2-copper-stocks-to-buy-right-now">2 Copper Stocks To Buy Right Now</a> 
The Steel Thesis:
In the new note, Goldman raised its 2021/2022 hot rolled coil (HRC) steep price forecasts from $1,399/$950 per ton to $1,572/$1,013 per ton. In the longer-term Goldman reiterated its $700-per-ton price forecast for 2023 and beyond.
&ldquo;In spite of our positive longer term outlook relative to historical levels, we note that the path towards our higher normalized price forecast must trend lower at some point,&rdquo; Chieng said.
Given expectations of a softening in steel prices, Chieng recommended investors take a more defensive approach to steel stocks heading into the fourth quarter. She is bearish on U.S. Steel largely due to its negative free cash flow. For Nucor, Chieng said the stock&rsquo;s additional upside is limited following its 105.9% gain in the past year.
Commercial Metals shares have lagged steel stock peers, and Chieng said the company has relatively low HRC exposure. In addition, she said auto contract repricing, accelerated deleveraging and a discounted valuation make Cleveland-Cliffs an attractive buy at current levels.
Benzinga&rsquo;s Take: Benzinga&rsquo;s Take: The VanEck Vectors Steel ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/slx#NYSE">SLX</a>) is already up 65% in the past year, so the excess cash flow generated from higher prices in the industry may already be priced into the stocks to a large degree.
The big question for steel stock investors is when steel prices start to pull back and how deep that pullback will be.

Upgrades

Downgrades

Price Target

Goldman Sachs Downgrades US Steel, Upgrades Cleveland-Cliffs Ahead Of Steel Market Mean Reversion

The 2021 surge in steel prices has once again prompted Bank of America to raise its earnings outlook for U.S. steel stocks.
EPS Adjustments: On Wednesday, Bank of America analyst Timna Tanners raised her 2021 and 2022 EPS estimates for steel stocks across the board and is now expecting significant earnings beats from all the steel stocks she covers in 2021. Here&rsquo;s a rundown of the 2021 EPS changes:
<ul>
<li>Commercial Metals Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cmc#NYSE">CMC</a>), EPS estimate raised from 78 cents to 87 cents.</li>
<li>Nucor Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nue#NYSE">NUE</a>), EPS estimate raised from $4.40 to $5.38.</li>
<li>Reliance Steel &amp; Aluminum Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/rs#NYSE">RS</a>), EPS estimate cut from $4.43 to $4.35.</li>
<li>Steel Dynamics, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/stld#NYSE">STLD</a>), EPS estimate raised from $2.96 to $3.62.</li>
<li>United States Steel Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/x#NYSE">X</a>), EPS estimate raised from $2.53 to $2.80.</li>
</ul>
Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/21/04/20842665/unprecedented-steel-bubble-heres-how-to-play-it">&#39;Unprecedented Steel Bubble&#39;: Here&#39;s How To Play It</a> 
Despite the near-term tailwinds in steel prices, Tanners said the current pricing environment is unsustainable and investors should be prepared for the fallout.
U.S. benchmark hot rolled coil spot prices recently reached near $1,700 per ton, about 2.5 times higher than their historical level.
How To Play It: Tanners is projecting HRC steel prices will&nbsp;fall to an average of $1,075 in the second half of 2021 and all the way back down to $600 in 2022.
&ldquo;Our conviction of falling prices is supported by our Steelmageddon oversupply thesis, which was delayed to 2022E due to 2021&rsquo;s COVID-inspired supply squeeze and some delayed capacity startups,&rdquo; Tanners said.
The analyst&nbsp;said steel stocks typically correct before steel prices do in past bubbles, making timing the trade very difficult.
For now, she said investors need to be selective within the steel group. Her top stock picks include Cleveland-Cliffs Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/clf#NYSE">CLF</a>), Reliance and Steel Dynamics.
Benzinga&rsquo;s Take: The VanEck Vectors Steel ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/slx#NYSE">SLX</a>) is already up 38.3% year-to-date, so the excess cash flow Tanners is expecting in coming quarters may already be priced into the stocks to a large degree.
The big question for steel stock investors is when steel prices start to pull back and how deep that pullback will be.

Long Ideas

The 'Great Steel Squeeze Of 2021' Continues: What's Next?

The following post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga. 
The S&amp;P 500 Index is made up of various sectors and industries. And even though the 56% return of the index over the past year is considerable, some of these sectors and industries have beat this by a large margin.
There&rsquo;s a good chance this trend continues.
The VanEck Vectors Gaming ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bjk#NASDAQ">BJK</a>) invests in the stocks of publicly traded casinos and casino hotels, sports betting and lottery service companies, and gaming technology and gaming equipment companies. It has gained more than 100% over the past year.
<img alt="bjk.png" src="https://www.benzinga.com/files/u344550/bjk.png" style="height:400px; width:640px" />
See Also: <a href="https://www.benzinga.com/news/21/04/20640495/gamestop-chewy-and-more-these-are-the-stocks-being-added-to-the-dave-portnoy-backed-etf">GameStop, Chewy And More: These Are The Stocks Being Added To The Dave Portnoy-Backed ETF</a>
The VanEck Vectors Oil Services ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/oih#NYSE">OIH</a>) invests in oil equipment, oil services, and oil drilling companies. Over the past year, the price of the shares has risen by about 140%.
<img alt="oih.png" src="https://www.benzinga.com/files/u344550/oih.png" style="height:400px; width:640px" />
The VanEck Vectors Steel ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/slx#NYSE">SLX</a>) invests in companies that are in the steel industry. Over the past year, the price of the shares has soared by about 160%.
<img alt="oih.png" src="https://www.benzinga.com/files/u344550/oih.png" style="height:400px; width:640px" />
The preceding post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice. 
&nbsp;

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