The U.S. Census Bureau reported December steel imports of $1.3B. Although steel imports are well off their lows this market shows the fragility and weakness of the rebound in the real economy. Steel imports remain nearly 70% off their highs set in 2008:
Although demand from China remains fairly robust the domestic picture is much weaker. Nucor, in their earnings release this morning, is still very concerned about the real estate markets:
“We believe that the most challenging markets for our products will be those associated with residential and nonresidential construction, which continue to show little, if any, strength.”
John Surma, CEO of U.S. Steel, is a bit more optimistic, but remains cautious about any impending recovery:
“We continue to believe that the U.S. and global economies are in the early stages of a gradual recovery. While we are becoming more optimistic, primarily due to improvements we are starting to see in the manufacturing sector, we remain cautious in our outlook for end user demand.”
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.