Although the rally in steel stocks has cooled in February, investors are still generally optimistic on the outlook for domestic names like Steel Dynamics (STLD) and Nucor (NUE), as well as global plays like ArcelorMittal (MT). That enthusiasm has not extended out to Russia's Mechel (MTL) to the same degree, as analysts are concerned not only about the company's higher-cost steel operations, but also its over-leveraged balance sheet and its unimpressive history of organic growth.
Can Integration Pay Off?
As the largest producer of coking coal in Russia (with well over 20% share), and a large iron ore miner as well, Mechel is well-covered for its own steel needs, and it's the second-largest long steel maker in Russia (behind Evraz). Unfortunately, this level of internal integration hasn't necessarily always paid off for shareholders.
Please read the full story here:
Can Much-Maligned Mechel Outperform?
No comments:
Post a Comment