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US steelmakers give positive outlooks for industry SA: Two major United States steelmakers reported contrasting quarterly results on Tuesday, but both gave positive outlooks for the industry as improving
U
economic conditions boost
demand and prices, Reuters reported. US Steel Corporation stock fell by 2.8 per cent to $50.37 as it reported a widerthan-expected loss in the first quarter, while AK Steel's shares rose by 5.4 per cent to $16.81 as its results beat Wall Street estimates. "We expect to report a significant overall operating (in the second profit quarter), primarily due to the realisation of price increases
in our nat-rolled segment," US Steel Chairman and Chief Execulive Officer, John Surma said. AK steel said it expected a strong increase in second-
quarter steel shIpments from the first quarter with average per-ton selling prices seven per cent higher. US Steel posted a third consecutive
quarterly
loss,
but higher steel prices and shipments helped it trim the
red ink from the previous year.
The net loss narrowed to $86mn, or 60 cents per share, from $157m, or $1.10 per share, a year earlier, the
Pittsburgh-based company said. Analysts were expecting a loss of 37 cents a share. AK Steel posted a higher first-quarter net profit of $8. 7m, or eight cents per share, compared with $1.9m, or 2 cents per share, for the same quarter of 2010. Analysts
customer demand for carbon nat-rolled products continued
shipments and raw steel capability utilisation for the company's North American and European nat-rolled
with economic growth. The
Raw materials costs are expected to remain relatively stable. "While recent order rates have moderated, we
operations.
improvements were partially
remain
He said average realised prices increased by $63 per ton in the first quarter to $720 per ton as the company began to realize the benefits of increased spot market and some contract prices. Shipments increased by three per cent to 4m net tons as
offset
to moderately increase in line
by
increased
raw
fust quarter. The company anticipates its second-quarter average
per-tonne selling price will be
optimistic
approximately seven per cent
that improving global economic
higher than the first quarter, with an operating profit of about $65 per tonne. It said its average selling price for the first quarter was $1,109 per tonne, which was about nine per cent higher than the first quarter of 2010.
cautiously
materials costs, Surma said.
conditions will continue, further
Looking ahead, he said nat-rolled results for the second quarter are expected to improve significantly compared to the first quarter, driven largely by significantly higher average realized prices.
stimulating end-user demand," Surma said. Ohio-based AKS said it expected shipmenls in the second quarter to be between 1,500,000 and 1,550,OOOtonnes-up from 1,423,100 t!lnnes shipped in the
on average were expecting
a loss of one cent per share, according to Thomson Reuters
I/B/EJS. KeyBanc Capital Markets Analyst, Mark Parr, said AK Steel's results reflected "strong
underlying cost performance in the face of iron ore and
coal cost pressures.
"AKS is getting back to basics, with solid operational execution beginning to be revealed," he wrote in a note.
Commenting on the first quarter, US Steel's Surma noted "improving economic conditions and firm customer
demand" led to increased average
realised
prices,
Soaring food prices to dent Asia's growth - ADS
S
OARING food and fuel prices . are
threa tening
to derail growth in Asian
economies,
according
to a report by the Asian Development Bank. The ban k has warned that if food and fuel prices continue to surge, economic
growth in the region could be reduced by up to 1.5 per cent this year. According to the bank, domestic food prices have risen at an average of 10 per cent in many economies this year.
Asian
Oil prices have also surged because of the crisis in the Middle East. The bank said that a combinatio n of these two factors had been a major setback for growth in Asian economies.
"Left unchecked, the food crisis will badly undermine recent gains in poverty reduction made in Asia" Asian Development Bank said. While Asian economies have emerged strong from the global financial crisis, the riSing cost of living has become a big concern in the region.
The ADB has warned that the recent surge in food price is threatening to push millions of Asians into extreme poverty. According to the bank's study, a 10 per cent rise in domestic food prices may result in almost 64 million people being pushed into extreme poverty. According to the
ADB's chief economist, Changyong Rhee, "for poor families in developing Asia, who already spend more than 60 per cent of their income on food , higher prices further reduce their ability to pay for medical care and their ch ildren's education. "
The bank also warned that food prices would remain volatile in the short term .
It said that while there
had
been
production
shorHalls in some coun tries
because of bad weather, prices had a lso been pushed up by other factors, such as the weakening United States dollar and rising fuel costs.
This has resulted in many countries imposing export bans on their produce, a
practice that is not helping the cause, according to the bank. "To avert this looming crisis it is important for countries to refrain from
imposing export bans on food items, while strengthening social safety nets," Dr. Rhee said. "Efforts to stabilise food production should take centre stage, with greater investments in agricultural infrastructure to increase
crop production and expand storage facilities, "
Rhee added that these measures would ensure that food produce is not wasted, thus helping to keep prices in check.
• A trader works with a telephone receiuer in the crude oil and natural gas options pit on the floor of the New York Mercantile Exchange in New York...on Monday. Photo; Reuters.
S&P 500 rises above hig~est closing level SA: United States in profit. 3M, the maker of oversee about $108bn as of the 154 companies in stocks rose, sending products including Scotch chief investment strategist at the S&P 500 that reported U the Standard & Poor's 500 tape and Post-it Notes, rose PNC Wealth Management in results since April 11 , I
Index to its highest level since June 2008, as companies from United Parcel Service Incorporated to Ford Motor Company and 3M Company beat analysts' profit estimates. UPS, the world's largest package-delivery company and considered a proxy for economic growth, added one per cent after also raising its earnings forecast. Ford, the second-largest US automaker, gained 3.5 per cent after reporting a 22 per cent jump
by 1.5 per cent. Bloomberg reports The S&P 500 gained 0.8 per cent to 1,345.37 at 1O.49am in New York and reached 1,345.63, the highest level of the bull market that started in March 2009. The Dow Jones Industrial Average increased 82 .76 points, or 0.7 per cent, to 12,562.64, also at an almost three-year high . "The earnings season has been amazingly strong," E. William Stone, who helps
Philadelphia, said. ''That's very encouraging. It's a testament to the global growth story. If you are a believer that earnings are sustainable, stocks certainly do not look expensive yet." The S&P 500 rose by 6.2 per cent in 2011 through Tuesday, extending last year's 13 per cent rally, amid government stimulus measures and higher-thanestimated corporate profits. Earnings- per-share beat estimates at 79 per cent
Ford records best profit in 13 years ORD said the 2011 outlook was good despite higher commodity costs Ford has unveiled its strongest first quarter profits for 13 years, helped by increasing demand fuel-efficient for more cars, British Broadcasting Corporation reports. Profits rose to $2.55bn in the first three months of 2011 , compared with $2.09bn at the same period the year before. uO ur team delivered a great quarter, with solid growth in all regions," said Ford president, Alan Mulally. Ford said the 2011
F
conditions" .
a
had "minimal" impact on its business.
strong
performance
in
its home North American market, as well as "solid improvement" in Europe.
US sales were up 16 per cent, while market share in the Asia Pdcific and Africa regio ns also increased, the
carmaker said. Ford said it was confident sales would keep rising "despite uncertain economic
"We expect our annual to
continue
consumers increased more
than forecast in April, signalingtheimproving labour market is helping Americans weather
rising
to
grow substantially," said Mr Mulally. Ford also said that last month's earthquake in Japan
Some analysts said the carmaker could actually take business away from Japanese rivals.
"I think Ford and a lot of the other American automakers will take market share from the Japanese," said Channing Smith at Capital Advisors.
fuel
costs.
The Conference Board's confidence index rose to 65.4 from a revised 63.8 reading in March, figures from the New York-based private research group showed on Tuesday. The median forecast of economists
outlook was good, despite higher commodity costs. Revenue for the first quarter was $33.1bn, up from $28.1bn a year earlier. The firm said it had seen
volumes
according to d,ha compiled by Bloomberg. 1 Stocks extended gains after a report showed confidence among US
surveyed
by
Bloomberg News projected an advance to 64.5. Stock futures rose before the open of regular trading even as a report showed that residential real estate prices
dropped in February by the most in more than a year, a
sign the US housing market is struggling to stabilise. The S&P/Case-Shiller index of property values in 20 cities fell by 3 .3 per cent from February 2010, the biggest year-over-year decrease since November
2009. The decline matched the median forecast in a
Bloomberg News survey.