NEW YORK (TheStreet) -- Steelmakers have lifted prices for certain products to levels not seen since the boom era, inducing a bullish spirit in some industry watchers, who say share prices among steel names have yet to catch up.A run-up in raw materials costs has helped steel mills press home higher prices with their biggest customers, especially auto makers and distribution centers. The going price for a ton of hot-rolled coil -- the core product of the traditional Big Steel blast furnace -- has spiked from about $500 in early December to more than $800 as of mid January. The last time it saw such heights came in April 2008. Certainly, steel stocks experienced a sharp rally in December as they announced price hike after price hike. But bullish observers point out that the last time steel prices were at these levels, U.S. Steel ( X) shares were trading north of $150, Nucor ( NUE) traded at more than $70 and AK Steel ( AKS) was above $65. The stocks now stand at $55, $45 and $15, respectively. The reasons behind the raw materials price inflation have been well documented. Epochal floods have inundated the coal mines of Queensland, Australia, which supplies nearly 70% of the planet's coking coal, used to smelt iron ore in blast furnaces, and therefore a crucial steel ingredient. China's steel industry -- the biggest on earth -- continues to absorb so much coal and iron ore that the likes of Rio Tinto ( RIO) and Vale ( VALE) posted record production during the fourth quarter. Meanwhile, the price of scrap metal has roared higher, allowing the electric-arc furnace companies such as Nucor and Steel Dynamics to increase prices as well. Still, investors are understandably wary of the bullish argument on steel. In the first half of 2010, as the economy looked to be entering recovery, steelmakers cranked up production at mills around the country. The decision turned out to be premature, and prices fell hard later in the year as too much supply entered the market. Industry watchers are wondering whether the most-recent price hikes are sustainable. A recent survey of institutional investors conducted by the metals analysts at UBS revealed that most of the participants "were not convinced ... that price hikes
Investors are waiting for U.S. Steel's vaunted operating leverage to kick in. the company surprised Wall Street by posting another loss when it reported third-quarter results in October. This time around, investors will be looking for the company's traditional qualitative guidance for the year ahead. When the economy is growing, U.S. Steel's profit soars, since its costs are fixed (the company controls its own iron ore mines.) Income Statement
U.S. Steel is slated to report fourth-quarter results before the bell on Jan. 25. On average, analysts are looking for a loss of $1.11 a share on revenue of $4.22 billion. A year ago, the company lost $1.83 a share on revenue of $3.35 billion. Expectations are for the company to return to the black in the first quarter of 2011. Analyst Ratings
Of the 11 analysts covering U.S. Steel, six rate the stock at the equivalent of strong buy or moderate buy. Four have holding ratings and one has a strong sell view of the stock.
Nucor already preannounced fourth-quarter EPS, and it isn't pretty. For just the second time during this downcycle -- since the financial crisis and the recession began -- Nucor will show a loss on its quarterly bottom line. The company told investors to expect red ink of 10 to 15 cents per share for the fourth period. The company depends on a vibrant construction market more than many of its peers. Income Statement
Nucor is scheduled to release fourth-quarter results on Jan. 27. Analysts are calling for a loss of 9 cents a share, on revenue of $3.93 billion. A year ago, it earned 18 cents a share on revenue of $2.94 billion. Analyst Ratings
Of the 11 analysts covering Nucor, four have buy ratings on the stock and five have holds. Two analysts, meanwhile, rate Nucor as a sell, making the sentiment surrounding Nucor among the most bearish in the sector.
Steel Dynamics ( STLD) issued fourth-quarter guidance in December -- on the same day as Nucor, in fact, a company to which it will be forever twinned. (Steel Dynamics was founded in the 1990s by former managers at Nucor). The company, known as a low-cost producer, is attempting to free itself from some outside raw materials suppliers by creating its own pig-iron replacement. Income Statement
Steel Dynamics is scheduled to release official fourth-quarter results on Jan. 24. Analysts are calling for a profit of 9 cents a share, on revenue of $1.6 billion. A year ago, it earned 12 cents a share on revenue of $1.18 billion. Analyst Ratings
Of the nine analysts covering Steel Dynamics, eight have the equivalent of strong or moderate buy ratings on the stock. The last one rates the company's stock at hold.
AK Steel has been squeezed by rising feedstock costs for nearly a year. The blast-furnace operator doesn't control its own sources of iron ore, like U.S. Steel. Earlier this month, the stock took a hit when Goldman Sachs cut its ratings to sell from neutral based on a weak outlook for electrical steel, used in power cables, stations and transformers. Income Statement
AK is scheduled to release results on Jan. 25. Wall Street is expecting a bloody quarter from the West Chester, Ohio, company: a loss of 63 cents, on revenue of $1.4 billion. That compares with a year-ago profit of 41 cents a share, on revenue of $1.32 billion. Analyst Ratings
Only one of the ten analysts covering AK Steel recommends buying the stock. Of the rest, seven rate the company's shares at hold a two at sell. -- Written by Scott Eden in New York >To contact the writer of this article, click here: Scott Eden. >To follow the writer on Twitter, go to http://twitter.com/ScottEden. >To submit a news tip, send an email to: email@example.com.