Steelmakers: Investors Should Seek Greener Pastures
With steel prices expected to remain lower for longer, every steelmaker in our coverage universe now operates with a no-moat rating.
Andrew Lane: Amid strong headwinds related to low steel prices and rising export volumes from China, we recently reassessed our outlook for steelmakers. Although short-term challenges can often lead to attractive investment opportunities, our outlook for steel is less optimistic, as the challenges facing the global steel industry appear to be more structural than cyclical.
Accordingly, we've cut our long-term steel-price forecast, and we contend that steel prices will remain "lower for longer." Per our forecast, inflation-adjusted steel prices will remain below the 2015 average through the end of the decade--a level well below the trailing 10-year average.
Andrew Lane does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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