Bolling's Triple Play: Hot Rolled Steel
Eric Bolling
05/14/08 - 07:55 AM EDT
Editor's Note: Eric Bolling is new to TheStreet.com.
A top Wall Street trader and an on-air television personality for the Fox Business Network, Bolling specializes in commodities, technology, resource trades and ETFs. He will provide regular picks in his column.
There have been only 14 or so unassisted triple plays in modern Major League Baseball history ( 107 years or so of it ). However, I would credit the perfect game (15 times in history of the Majors) and hitting four dingers in a single game (15 times) as monumentally more heroic, even if they are slightly more frequent.
That being said, it is still an interesting sequence of fates that have to be present in order to score an unassisted triple play. There has to be no outs in the inning and at least two men on base. Then, the batter must hit a line drive to a fielder covering a base because a runner is stealing, putting the fielder in the right place at the right time to make all three put-outs.
Two weeks ago I ran a 'Bolling For Dollars' segment on Fox Business called 'Ironman Investing.' I talked about the strong prices for "hot rolled steel, baby." I outlined why I felt
U.S. Steel(X Quote - Cramer on X - Stock Picks),
Mittal(MT Quote - Cramer on MT - Stock Picks) and
Vale(RIO Quote - Cramer on RIO - Stock Picks) were positioned for a run. Little did I know that we were on the verge on an unassisted triple play. But here's how it's playing out.
Line drive: 1 out. There is no doubt about the awesome growth picture in the emerging economies around the world. Hot rolled steel prices have continued their torrid ascent as the world is demanding more and more steel for infrastructure, buildings and massive increases in automobile ownership in the new Chinese economy.
Put out: 2 out. The oil industry is one of the biggest customers of the steel industry. Why? It buys tubular steel for a wide range of uses. The most obvious is the drilling deeper and deeper into the ground, sea or wherever they think they might find the stuff that goes for $125.85 per 42-gallon drum. Pipeline companies pipe the slick stuff from location to location and need steel for that. And finally, the refiners need steel for those much publicized antiquated refineries. The bottom line is that a customer with a fat wallet is good.
Put out: triple play complete. If all the news so far wasn't good enough, this finishes it. U.S. Steel recently decided to raise prices and analysts upgraded them. Wow, I guess the demand for the product is so strong they can not only add input cost surcharges, but they get The Street to applaud the move. I will bet the higher price sticks for a while even if the steel market gets soft (but, there seems to be nothing like that on the horizon).
The triple stock play was and is U.S. Steel, based on its pricing power, Street sweetheart status and customer base. I also highlighted Mittal because of its strong presence in the emerging Indian and Chinese economies. It is also going to benefit from the U.S. Steel price change. And finally, I have always loved RIO. If you don't have iron ore, you can't make steel, and RIO is the world leader in iron ore mining. It accounts for 17% to 20% of the world production of iron ore (depending on who you talk to). This stock has been a Bolling fave for years and until things change in the commodity market, I will continue to like RIO.
As it turns out, all three of these steel plays settled at the all-time highs yesterday. Remember..... "it's only their all-time high...for now!"
Hot rolled steel is an unassisted triple play in my book.
