Loading prices...

Register/Sign in
ScrapMonster
Sell Your Junk CarGet an instant quote for your car on ScrapMonster.com
Steel News April 02, 2020 06:10:42 PM

Goldman Sachs Bullish on These Two EAF Steelmakers

Paul Ploumis
ScrapMonster Author
Goldman Sachs noted that the ongoing recession on account of the global epidemic is likely to last until the end of 2020.

Goldman Sachs Bullish on These Two EAF Steelmakers

SEATTLE (Scrap Monster):  Investment banking major Goldman Sachs foresees bright future for electric arc furnace (EAF) steelmakers. It noted that two U.S. steelmakers- Nucor Corporation and Steel Dynamics Inc. (SDI) - have highest chances of weathering the COVID-19 storm.

According to Goldman Sachs, scrap-melting steelmakers are likely to have edge over steelmaking facilities that make use of basic oxygen furnaces (BOFs) for producing steel, primarily due to their cost-effectiveness. On the basis of online report from Barrons’, Goldman Sachs upgraded Nucor Corp. from a “hold” to “buy” rating. Last week, it had performed a similar ratings upgrade on SDI.

ALSO READ: EAF Route Accounts for Barely 10% of China's Total Steelmaking

Goldman Sachs noted that the ongoing recession on account of the global epidemic is likely to last until the end of 2020. Nucor and SDI, with healthy balance sheet, reduced debt-level and capex flexibility are likely to rebound, as market conditions return to normalcy in 2021, it noted.

On the other hand, Goldman Sachs downgraded the price target for Pittsburgh-based United States Steel Corporation (U.S. Steel) from $9 per share to $2 per share. It must be noted that steelmaker produces most of its output using the expensive BOF method. The company had recently announced idling of blast furnace at Gary and Great Lakes works and tubular operations at Lonestar and Lorain facilities.

×

Quick Search

Advanced Search