United States Steel Corporation (X) Stock Sinks on Ore, Leak Concerns

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United States Steel Corporation (NYSE:X) is among a host of steel stocks dropping Wednesday amid lower prices for iron ore, but there’s also concern amid a potentially hazardous leak from one of its facilities in Indiana, near Lake Michigan.

X stock is off by roughly 10% in Wednesday’s trade, joined by AK Steel Holding Corporation (NYSE:AKS), off 6%, and Cliffs Natural Resources Inc (NYSE:CLF), down 7%, amid a continued selloff in iron ore. The latest session saw iron ore drop 8.5% to below $70 per ton for the first time in five months.

All told, iron ore prices have dropped by more than 11% so far in April alone, and roughly 28% in 2017.

That’s cutting into the likes of X and AKS, which had gained 70% and 26% respectively heading into April, though those gains have been blunted by a multiday slump in ore prices.

Also weighing on X stock, however, is news from the U.S. Environmental Protection Agency, which said that U.S. Steel has reported a leak of wastewater that contains hexavalent chromium — a toxic compound that can cause lung cancer, as well as damage to the eyes, skin, nose and throat, at high levels — into a waterway roughly 100 yards of Lake Michigan.

While there’s no indication that the compound actually has reached the lake, the National Park Service has closed two local beachfront areas. Meanwhile, Indiana American Water — a local water utility — is refraining from pulling water from the lake as a precautionary measure.

X stock chart

The bounce in X stock has dropped shares well underneath the intermediate-term 50-day moving average, down to lows last seen in March 27. This price level also acted as support amid U.S. Steel’s decline from early December through the start of February.

Should the $31-$30.50 area not hold this time, next support could be the 200-day moving average around $27.60 — another 12% lower.

As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/04/united-states-steel-corporation-x-stock-sinks-on-ore-lake-michigan-leak/.

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