Investopedia: Industrial Softness Spreading Out

There have been some concerning signs recently that the economic recovery is petering out. Railroad traffic is softening and industrial supply giant Grainger (NYSE:GWW) has been reporting decelerating growth in its U.S. orders. With recent data points from leading mini-mills and a major European industrial company, it looks as though the second quarter saw a definite slowdown, and growth for the rest of the year is up in the air. 

Spotty Demand for Steel? 

Last week saw earnings preannouncements from both Nucor (NYSE:NUE) and Steel Dynamics (Nasdaq:STLD). Nucor was relatively upbeat in the text of its release, talking about how prices for finished steel have caught up with rising material costs. That said, things have not improved enough - the midpoint of Nucor's guidance was about 10 cents (or 12%) lower than the prior average analyst estimate.

The report from Steel Dynamics was less rosy (and more detailed). Steel Dynamics has seen lower recycling profits as the cost of scrap copper and steel have risen. Worse yet, steel orders were down 25% in April before starting to improve in May.

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