Cleveland Cliffs Inc (CLF)

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Why did Cleveland-Cliffs, Nucor jump today? Chinese activity looking up

Jan. 05, 2022 6:11 PM ETCleveland-Cliffs Inc. (CLF), NUESTLD, X, RS, SLXBy: Carl Surran, SA News Editor25 Comments


Steel stocks including Cleveland-Cliffs (CLF +5.2%) and Nucor (NUE +4.8%) soared in today's trading following reports that China's central bank may ease monetary policy before the Lunar New Year holidays.

Among other steel names: STLD +3.8%, X +2.3%, RS +1.9%.

Also, China's manufacturing purchasing managers index continued to rise in December, with several steel market sources expecting manufacturing activity in the country to continue improving in H1 2022, S&P Global Platts reports.

New steps, combined with policies implemented last month including cuts in a benchmark lending rate and reserve requirements following several months of tightening, would lend support to both consumption and construction-related sectors.

ETF: SLX

But while U.S. hot-rolled coil prices hit a historic high in 2021 thanks to tight availability, industry analysts tell S&P Global Platts that new capacity coming online this year and later likely will drive prices further down from the peak.

Cleveland-Cliffs is leading the steelmaking industry in decarbonizing operations, which has made the company more competitive within the industry by protecting it from pricing risks and attracting new demand arising from needs for carbon-friendly steel, Livy Investment Research writes in a bullish analysis posted on Seeking Alpha.

Now Read: Cleveland-Cliffs: Why ESG Makes It More Attractive Than Ever