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Pipeline


As newly inaugurated President Donald Trump signs one executive order after another, not every bit of positive (or negative) fallout is immediately obvious. For example, the orders reviving the Keystone and Dakota Access pipeline projects brought good news to the steel industry that not everyone noticed.

That’s because buried within those orders was a requirement that the pipelines be built with American steel “like we used to in the old days.” Despite a lack of widespread awareness, investors caught on quickly.

Related: BROKERS IN FINANCEBOARDS

Steel Stock Results Mixed

Among companies boosted by the news were U.S. Steel (NYSE:XC), which closed up 1.28% at $33.22 Tuesday and Nucor (NYSE:NUEC) up 1.43% on the day at $60.92.

Two others, Olympic Steel (NASDAQ:ZEUSC) and AK Steel (NYSE:AKSB) closed down 1.76% and 6.57% respectively. AK dropped following a conference call in which the company said it sees Q1 prices "relatively flat" versus the just reported Q4.

Revival May Be Underway

While signing the orders Trump said, "We build the pipelines. We want to build the pipe. It's going to put a lot of workers, a lot of steelworkers back to work." This was music to steelworkers’ ears, not to mention the ears of investors who have been waiting for a positive sign.

Reviving the steel industry in the U.S. was focus of Trump’s presidential campaign. One major part of that was a pledge to take a tough stance on China moving forward with regard to steel dumping and price fixing.

AK Down But Not Out

Share of AK Steel traded up 10.4% early Tuesday on stronger-than-expected fourth quarter earnings. Following the conference call, shares dropped. This is not to negate the positive earnings of 25 cents per share on revenue of $1.42 million. Especially since Wall Street expected earnings of 6 cents per share on revenue of $1.41 million.

The full impact of Trump’s executive orders may still to be felt. At any rate AK Steels shares are down almost 15% year to date but are up a phenomenal 350% over the past 12 months.

Related: PRESIDENT TRUMP HAS WALL ST. CAUTIOUS

Along Comes Aluminum

Meanwhile, steel isn’t the only metal hoping to be part of the "making America great again" movement. Alcoa Corp. (NYSE: AA) was founded in 1888 and went through a radical transformation recently splitting into two companies in 2016.

The Alcoa part still mines, smelts and refines aluminum and hopes to see a resurgence in demand for its product under Trump. The new part, Arconic Inc. (NYSE:ARNCC) makes parts for specific industries, mostly aerospace and automotive.

After posting a loss, Alcoa noted that shipments of aluminum products were up climbing to 852,000 metric tons from 819,000 metric tons.

The company expects growth of 4% in the new year (over 2016). Shares of Alcoa rose 3.6% to $38.83 in after-hours trading Tuesday.



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