Our Outlook for Basic Materials Stocks
Companies with more exposure to the United States should fare better than those tied to demand in Europe and China in 2013.
Quarter-End Insights
Mentioned: Cloud Peak Energy Inc (CLDPQ)
, Arch Coal Inc (ARCH)
, Nucor Corp (NUE)
, Peabody Energy Corp (BTUUQ)
, E.I. du Pont de Nemours & Co (DD)
, Alpha Natural Resources Inc (ANRZQ)
, Weyerhaeuser Co (WY)
, CNX Resources Corp (CNX)
, Steel Dynamics Inc (STLD)
, DuPont de Nemours Inc (DD)
- Fundamentals in U.S. thermal coal should continue improving next year, thanks to rebounding natural gas prices, a hot summer in 2012 that helped whittle down overflowing coal inventories, and significant curtailment in domestic coal production.
- We think pricing pressure for most industrial metals will continue in 2013, as China--the most important source of demand--inevitably shifts away from its investment-driven growth model.
- The outlook for steel demand growth in 2013 is strong in the Americas, but we think there is downside risk in Europe and China.
Elizabeth Collins has a position in the following securities mentioned above: WY, FBR. Find out about Morningstar’s editorial policies.