U.S. Steel has hit a new high following on a J.P. Morgan upgrade of the sector, citing recently announced price hikes and supply constraints that could push prices still higher. U.S. Steel is up 5.6%. AK Steel is up 7.4%. J.P. Morgan analysts raised their price targets on both companies, as well as Arcelor Mittal.
There was also a bit of good news for the economy in J.P. Morgan's note on steel:
Scrap prices have rebounded by roughly 25% since their mid-November lows, and look set to increase by another 15% due to seasonal supply constraints, strong exports, and low inventory levels at the mills.
Scrap metal is seen as something of a leading indicator for the economy, as the price rise is supposed to reflect that manufacturers are buying again. Former Federal Reserve Board chairman Alan Greenspan was fond of tracking scrap metal prices and saw them as a leading indicator of economic recovery in hard times.
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