Through TheFLY's Eyes: U.S. Steel.
from Theflyonthewall.com











U.S. Steel: At The Foundation Of Global Growth

After the recent two-week sell-off, if you think the secular or global growth trend in commodities and minerals has ended, think again. Demand for minerals and basic materials in Brazil, China, India and Eastern/Central Europe continues to be robust.

Moreover, a good short hand – or one way to quickly gauge the demand for commodities, and more broadly, the health of the ongoing global economic expansion – is to evaluate U.S. Steel (X).

That’s because U.S. Steel is leveraged primarily not to the American economy, but the global economy. In other words, as the global economy goes, so goes the fortunes of U.S. Steel. And right now things are going pretty well for the global economy, and for U.S. Steel.

U.S. Steel, which traded at $65.98 up 98c on Friday at mid-day, is experiencing strong demand for carbon flat-rolled and seamless tubular products. Further, orders are solid across the building spectrum – in the non-residential construction, capital goods, and energy markets. In addition, steel prices, after a period of consolidation, are firming gain – another sign of solid demand. And that’s a major reason why the analysts in the Reuters’ consensus estimate expect U.S. Steel to earn $8.52 per share in 2006.

So when news stories appear arguing that a ‘major global economic slowdown’ is imminent or underway, before forming a conclusion think first about those pictures of building cranes in use in China , Europe, and the Americas. And then check to see how U.S. Steel is doing.