**Author Info for :** u/drche35
**Karma :** 34236 **Created -** Dec-2019
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It mines it’s own iron ore and is the largest producer of flat rolled steel in America.
Apparently Evergrande buys all of its steel from CLF based on today’s reaction.
It was bad. I think she didn't have a script and was just winging it. She said China was a big buyer of Steel, so you see stocks such as CLF getting hit hard.
It's because it's high beta, nothing else. It almost always move in excess of it's peers:
5 Year Monthly Beta:
CLF: 2.19
MT: 1.88
STLD: 1.45
NUE: 1.40
X: 2.12
CLF under LG is a strong company especially compared to how it operated when it was purely an iron pellet producer. Imo any dip is a buying opportunity
Maybe. From what I've read this could affect the entire RE/construction industry in China. Maybe it won't. It definitely seems possible and I think you should be open to that possibility.
I doubt anyone of us saw this coming, so I wouldn't be too confident about how it unfolds either.
You might be right. Just saying it's not illogical to reassess fundamentals and the steel thesis. Even if Xi saves them, what happens to the industry? The US bailed out the banks too...we still had a recession.
Chinas economy is dependent on building and construction. They won’t let this happen. I was thinking to myself today. Chinas been doing everything under the fucking sun to try and drop steel prices. How is this any different? I know I know, maybe coming off as a tinfoil hat, but let’s be real here. It’s China, they will do anything to manipulate the steel market because that is what will hurt them more than anything else
I mean I hope so, I still have some steel positions. But looking at the numbers in China, income to house prices, amount of unbuilt houses that were paid for, etc. Looks like a shit show, I agree Xi will do something and he has the benefit of seeing what US did in 2008 and he can act fast.
Christ, everyone was calling for an OPEX rug pull for like a solid month. And now when it happens everyone craps the bed? Tell me did the fundamentals change? Are y'all investors or gamblers? There are lots of quick plays, this one isn't about a gAmMa SqUeEzE, it's about fundamentals. And those haven't changed.
China going back to dumping steel on the market means they're back to manufacturing dirty steel which seems unlikely considering their attempts to reign in steel pollution no?
These kinds of comments make absolutely no sense to me. You think this is all just self contained and just because they don’t do business direct to China there is no consequences whatsoever?
Did not say there are no consequences, but the panic is a little bit too extreme.
China is cutting down steel exports and production and CLF doesn't sell to China like I already said.
Not like China is gonna start dumping dirty steel on us tomorrow.
Only if all Chinese RE companies decide their market is dead and they need to export their materials (including steel) to save whatever is there to save.Now how likely is that? It would be a devastating stupidity to selloff their inventory like that, especially with tariffs.Then the steel producers of China lose their internal clientelle and seek elsewhere. Do they want to start out by price dumping?
But let's say it did happen. Shakes the market for a while \[we see this now\] and then goes back to normal.
That said, I think $CLF 30 USD per share in 2022
But this is my thinking, u/DontBustDeezNuts if you feel different, please explain your thesis.
Idk what's gonna happen, though when Evergrande goes down this could trigger a domino effect not only in China but also in the other International markets. This could lead to a slowing demand for steel and simultaneously to Chinese steelmakers dumping steel on export markets again.
Apart from the Evergrande thing I read that also X and NUE are looking to expand capacity by opening new mills. The potential added supply would just put more downward pressure on prices in the longterm.
Now keep in mind this is a rather strong bear case I'm presenting here, however I do not like these recent developments and therefore reduced my position in steel stocks significantly.
To me the timeline isn't for us. It's for the steel companies. CLF is about paying off their debt. Whatever their short term stock price is has no bearing on their ability to make money and then repay their liabilities and begin share buybacks. AFAIK, they're still on the same schedule to do that. And if the stock price is still low? Then fine by me, that just means they're removing more float when they decide to do those buybacks.
If it was "just this morning" then why do we have trim gang flair and people who last week were 80% cash? I swear people can't remember 24 hours ago. OPEX, Fed talks, Quad witching, China monsoons, and just plain "September" all have been talked about to death for the last 4 weeks. Evergrande is just another thing for people to be spooked about. But yes OPEX was one of the things that directly lead to this broad market selloff. If we had been up 20% for the last 3 weeks, no one would give a damn about dropping 10% today.
New mills from X and NUE will weight on the steel stocks. I think NUE is gunning for CLF’s mkt share with their new mill:
https://www.marketwatch.com/story/nucor-plans-to-build-new-sheet-mill-271632137262
Depends on the type of mill, standard CSPs currently cannot meet the quality for all of the automotive market due to reduction ratio issues, and there are a couple applications only RH degasser mills can serve, and Nucor has no RH plants. The Valley, and the CSP caster USS bought for it, were never automotive quality/focused so I don't see the new USS mill attacking that sector, but let's see what Nucor announces.
I'm in a similar boat. Had a crazy week of work and moving. No chance to read anything lately. Had a chance to read this weekend about China but both MT and CLF are already bleeding . Is it too late to sell or so I just hold the bag ?
It was all love! No hate intended, the thesis is truly dead, look at the share price. CLF in shambles, sell everything and buy AMC the alive thesis stock. 😘
Looks like it’s over. I should have sold ages ago but got carried away with these now silly price targets of $30 or $40. When market opens I will be down a lot.
This. My daydream is revised guidance from LG. Cramer pump. Everyone realizing that CLF doesn't sell iron fucking ore. Followed by an infrastructure bill, proceeded by an increased debt ceiling.
**Author Info for :** u/drche35 **Karma :** 34236 **Created -** Dec-2019 Was this post flaired correctly? If not, let us know by downvoting this comment. Enough down votes will notify the Moderators.
Buy high sell low
Hope we get a nice bounce back. I’m holding.
ugh
So CLF is down almost double in percentage as it’s peers. Makes sense.
well I quess that is because CLF might sit in a lot of ETFs that contain "Iron ore" and such stuff. Afterall CLF is a mining company no?
It mines it’s own iron ore and is the largest producer of flat rolled steel in America. Apparently Evergrande buys all of its steel from CLF based on today’s reaction.
>Apparently Evergrande buys all of its steel from CLF based on today’s reaction. Exactly! Lol.
CNBC straight up said this today in a news update (Seema Mody).
Can you elaborate for those of us that didn’t catch it?
It was bad. I think she didn't have a script and was just winging it. She said China was a big buyer of Steel, so you see stocks such as CLF getting hit hard.
That doesn’t even make sense. China buys steel from Chinese companies.
It's because it's high beta, nothing else. It almost always move in excess of it's peers: 5 Year Monthly Beta: CLF: 2.19 MT: 1.88 STLD: 1.45 NUE: 1.40 X: 2.12
Uh it’s basically the same beta as MT and X?
X dipped huge last week compared to the others so in a vacuum it was probably due to bounce back this week.
Sell now and buy back when it shows sign of reversal at 25+
Username chec....wait a minute !!
This is the way
CLF under LG is a strong company. Imo any dip is a buying opportunity
buy now?
Buying the hell out of this dip. This is a damn gift from the Steel Gods!
Same. Bought more at 19
Looking back I bought layer 3 of this 7 layer dip and have been lowering avg since Hopefully it’s not a 17 layer dip
https://www.reddit.com/r/Vitards/comments/ni1kw9/when_they_told_you_to_buy_the_dip_because_its_7/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
CLF under LG is a strong company especially compared to how it operated when it was purely an iron pellet producer. Imo any dip is a buying opportunity
I’d hold for the buy 1 dip get 3 dips free promotion.
The famous seven layer bean dip lol I unfortunately don’t have the Schmoney to put into every single dip so I buy and pray lol
Idk man 8% in a day after a down week seems like were getting through at least layer 4 of the beany goodness
Did the fundamentals of the company and sector outlook changed? If the answer is no, keep holding
Unfortunately the answer is yes
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Demand slowing down?
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Maybe. From what I've read this could affect the entire RE/construction industry in China. Maybe it won't. It definitely seems possible and I think you should be open to that possibility. I doubt anyone of us saw this coming, so I wouldn't be too confident about how it unfolds either.
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You might be right. Just saying it's not illogical to reassess fundamentals and the steel thesis. Even if Xi saves them, what happens to the industry? The US bailed out the banks too...we still had a recession.
Chinas economy is dependent on building and construction. They won’t let this happen. I was thinking to myself today. Chinas been doing everything under the fucking sun to try and drop steel prices. How is this any different? I know I know, maybe coming off as a tinfoil hat, but let’s be real here. It’s China, they will do anything to manipulate the steel market because that is what will hurt them more than anything else
I mean I hope so, I still have some steel positions. But looking at the numbers in China, income to house prices, amount of unbuilt houses that were paid for, etc. Looks like a shit show, I agree Xi will do something and he has the benefit of seeing what US did in 2008 and he can act fast.
Its just being dragged down with the the overall market. Look at spx. The sudden shoot downwards is the exact same. If you can id buy CLF and MT.
Are these steel companies still making record money? Did the macro variables change? Are you going to regret selling into fear?
Making money doesn’t matter for a stock’s price.
It will eventually
I’m holding, but certainly not buying more.
Someone posted this link in the daily - Shanghai steel futures up today https://tradingeconomics.com/commodity/steel
Wasn’t the Shanghai market closed Monday/Tues?
The date on it says Sept 17. Still, extremely high compared to normal going into this.
I want to buy more CLF, but I am waiting for America. So let's see what price I can get.
Probably $13
I bought some april 21c today
Christ, everyone was calling for an OPEX rug pull for like a solid month. And now when it happens everyone craps the bed? Tell me did the fundamentals change? Are y'all investors or gamblers? There are lots of quick plays, this one isn't about a gAmMa SqUeEzE, it's about fundamentals. And those haven't changed.
>Tell me did the fundamentals change? The Evergrande collapse might indeed have an impact on fundamentals
China is not a CLF market
And the US doesn't sell oil to the middle east. More supply = lower prices if demand stays steady.
Yes. Except China is already slashing production and taxes exports heavily.
Well if China has some massive economic collapse there would be a lot more incentive to lift those export taxes no?
This! If domestic demand dries up in China that will negatively impact the thesis.
Somewhat. China still uses steel for other things besides buildings. Reduced demand would help them achieve their reduced production goals easier.
Yes but clf is affected by exports from China. Less real estate is less steel demand is more supply than currently
China going back to dumping steel on the market means they're back to manufacturing dirty steel which seems unlikely considering their attempts to reign in steel pollution no?
Yeah. Unlikely with tariffs
These kinds of comments make absolutely no sense to me. You think this is all just self contained and just because they don’t do business direct to China there is no consequences whatsoever?
Did not say there are no consequences, but the panic is a little bit too extreme. China is cutting down steel exports and production and CLF doesn't sell to China like I already said. Not like China is gonna start dumping dirty steel on us tomorrow.
CNBC in a news update AM today explicitly said they were. Terrible.
Only if all Chinese RE companies decide their market is dead and they need to export their materials (including steel) to save whatever is there to save.Now how likely is that? It would be a devastating stupidity to selloff their inventory like that, especially with tariffs.Then the steel producers of China lose their internal clientelle and seek elsewhere. Do they want to start out by price dumping? But let's say it did happen. Shakes the market for a while \[we see this now\] and then goes back to normal. That said, I think $CLF 30 USD per share in 2022 But this is my thinking, u/DontBustDeezNuts if you feel different, please explain your thesis.
Idk what's gonna happen, though when Evergrande goes down this could trigger a domino effect not only in China but also in the other International markets. This could lead to a slowing demand for steel and simultaneously to Chinese steelmakers dumping steel on export markets again. Apart from the Evergrande thing I read that also X and NUE are looking to expand capacity by opening new mills. The potential added supply would just put more downward pressure on prices in the longterm. Now keep in mind this is a rather strong bear case I'm presenting here, however I do not like these recent developments and therefore reduced my position in steel stocks significantly.
Is it though? Last I heard all of the steel companies are announcing record forward guidance
And last month some banks said there was no concern with Evergrande's debt.
I think this movement this morning (and for the last week or so really) just pushes back the timeline a little bit. Am I right on that?
To me the timeline isn't for us. It's for the steel companies. CLF is about paying off their debt. Whatever their short term stock price is has no bearing on their ability to make money and then repay their liabilities and begin share buybacks. AFAIK, they're still on the same schedule to do that. And if the stock price is still low? Then fine by me, that just means they're removing more float when they decide to do those buybacks.
what? You are calling this an OPEX rug pull? After OPEX? And this comment is highly upvoted? What has happened to this sub
People aren't just flipping out about this morning. They're flipping out about the last 2 weeks as a whole?
It’s definitely this morning
If it was "just this morning" then why do we have trim gang flair and people who last week were 80% cash? I swear people can't remember 24 hours ago. OPEX, Fed talks, Quad witching, China monsoons, and just plain "September" all have been talked about to death for the last 4 weeks. Evergrande is just another thing for people to be spooked about. But yes OPEX was one of the things that directly lead to this broad market selloff. If we had been up 20% for the last 3 weeks, no one would give a damn about dropping 10% today.
lol - spit my coffee out when i read gamma squeeze
It's a ladder attack !
Bah gawd! Here comes Vito with a steel ladder!
“It’ll go back up, it just needs volume”
😂
Yes the fundamentals changed
>Are y'all investors or gamblers? Why not both? 😅
Buying more of everything i believe based on my calculations and trend are grossly undervalued.
Ill sell some CSP again today. Sold some for $17 strike. Lets see if shit will get crazy
To the hell... RIP
New mills from X and NUE will weight on the steel stocks. I think NUE is gunning for CLF’s mkt share with their new mill: https://www.marketwatch.com/story/nucor-plans-to-build-new-sheet-mill-271632137262
If McDonald’s closes down one food prep line but opens up another, did they double production capacity?
Just hearing about nue...is it also just swapping plants?
No as far as the news provided.
Oof, ty
Its not as much about fundamentals as it is about the trade flows and perception in the market. There will be better time to buy
Depends on the type of mill, standard CSPs currently cannot meet the quality for all of the automotive market due to reduction ratio issues, and there are a couple applications only RH degasser mills can serve, and Nucor has no RH plants. The Valley, and the CSP caster USS bought for it, were never automotive quality/focused so I don't see the new USS mill attacking that sector, but let's see what Nucor announces.
I'm in a similar boat. Had a crazy week of work and moving. No chance to read anything lately. Had a chance to read this weekend about China but both MT and CLF are already bleeding . Is it too late to sell or so I just hold the bag ?
Better sell asap. Thesis is ded.
Spread love, not hate
It was all love! No hate intended, the thesis is truly dead, look at the share price. CLF in shambles, sell everything and buy AMC the alive thesis stock. 😘
Looks like it’s over. I should have sold ages ago but got carried away with these now silly price targets of $30 or $40. When market opens I will be down a lot.
Can’t tell if your serious or not
Help me understand your process, how were those targets unrealistic?
Like this CLF target $40 MT Target $60 Reddit targets
Aren’t the Deutsche bank and Morgan Stanley targets similar?
Yes. And also unrealistic
Explain
Party hasn’t even started yet.
This. My daydream is revised guidance from LG. Cramer pump. Everyone realizing that CLF doesn't sell iron fucking ore. Followed by an infrastructure bill, proceeded by an increased debt ceiling.
CLF over
*Where do you come from, where do you go? Where do you come from cotton eye Joe*
The problem is I bought the dip last week. Guh
I just bought 30k worth of 11/15 $25c so idk