Steel Shares Fall On Declining Demand, Prices

NEW YORK (AP) — Shares of steel producers fell Monday on fresh evidence that prices for several types of the commodity have fallen as well as indications that more such declines are coming.

Citi Investment Research analyst Brian Yu said in a client note that April's price for oil country tubular goods, which is used by petroleum drillers, fell 9 percent.

Yu also said cold-rolled steel was off 2 percent, while pricing for reinforcement bar was down 7 percent in Europe and down 5 percent in China.

Meanwhile, Jefferies analyst Yvonne Varano cut her estimates for Olympic Steel Inc. because of "continued deterioration in steel selling prices and the lack of demand."

She lowered her estimate for 2009 earnings per share to 95 cents from $1.50. Analysts polled by Thomson Reuters expect, on average, $1.23.

"Industry data and commentary continues to indicate a further decline in prices coupled with little to no demand," said Varano, who reiterated her "Hold" rating on Olympic shares.

In afternoon trading, shares of Olympic Steel fell $2.16, or 12.6 percent, to $15.02, U.S. Steel Corp. declined $3.23, or 13.3 percent, to $21.12, and Schnitzer Steel Industries Inc. retreated $4.56, or 13.2 percent, to $30.02.