TECK - Steel aluminum names slide after ADP jobs report bumps yields higher

2023-07-06 14:25:37 ET

Steel stocks post broad losses in Thursday's trading following a much stronger than expected ADP Employment Change Report for June, which triggered a jump in U.S. Treasury yields.

ADP said private sector jobs jumped by 497K, the biggest monthly gain since July 2022 and more than double the consensus estimate of 220K jobs gained and well above the downwardly revised 267K-job addition in May.

The strong jobs report leads to fears that the Federal Reserve will be more likely to resume raising interest rates, and higher rates are not favorable for steel demand.

Steel stocks ( SLX ) have been weak all day, including Cleveland-Cliffs ( NYSE: CLF ) -4.7% , U.S. Steel ( NYSE: X ) -4.1% , ArcelorMittal ( MT ) -2.8% , Steel Dynamics ( STLD ) -2.5% .

Aluminum names also trade sharply lower: Alcoa ( NYSE: AA ) -4.3% , Century Aluminum ( CENX ) -3.1% , Constellium ( CSTM ) -2.9% .

Also: Teck Resources ( TECK ) -4.2% , Freeport McMoRan ( FCX ) -4.1% , Southern Copper ( SCCO ) -3.3% , BHP ( BHP ) -3% , Rio Tinto ( RIO ) -1.9% .

More on U.S. Steel:

• Financial and valuation comparison to sector peers
• Analysis: U.S. Steel: The Pullback Is An Opportunity
• Stock price return: Down 4.5% YTD, up 40.5% in the past 12 months

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