Steel Industry to Suffer as China’s Iron Ore Appetite Slows

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Speaking an an investor conference on Wednesday, Blue Mountain Capital Management head Andrew Feldstein warned that diminished demand for iron ore in China would hurt American steel producers, including United States Steel (NYSE:X), Reuters noted.

Investors apparently shook off Feldstein’s warnings, sending shares of U.S. Steel up more than 2% in Thursday morning trading. Rival steel producers AK Steel (NYSE:AKS) and Nucor (NYSE:NUE) also rose about 2%.

Feldstein’s remarks follow similar warnings by fellow hedge fund manager David Einhorn last year. Einhorn noted that falling demand from Asia coupled with rising pension costs for U.S. Steel would dent the company’s profits.

Worries over the steel industry’s fortunes weren’t limited to U.S. companies. Feldstein also cited Australia’s Fortescue Metals Group and Japan’s JFE as vulnerable to sliding iron ore prices and Chinese demand shifts.

Einhorn’s Greenlight Capital recently sued Apple (NASDAQ:AAPL) in order to force the consumer electronics and computer maker to distribute more of its surplus cash to shareholders.


Article printed from InvestorPlace Media, https://investorplace.com/2013/02/steel-industry-to-suffer-as-chinas-iron-ore-appetite-slows/.

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