U.S. Steel Bending to Pressure

United States Steel Corporation (X) is a leading steel manufacturer in the U.S. Rising supply from China, low demand from the automotive and residential sectors and rising labor costs are affecting the company's operations. In order to consolidate operations, the company has closed several facilities and plans more shutdowns in the near term.

Going forward, U.S. Steel's tubular business will be unsustainable, given the sharp deterioration in energy prices and drilling activity, coupled with the continued onslaught of imports. These lead us to rate the stock a Hold.

Steel prices plummeted from record highs last year, though they have recovered modestly in recent months. In addition, U.S. Steel s tubular business will be unsustainable moving forward, given the sharp deterioration in energy prices and drilling activity, coupled with the continued onslaught of imports.

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