BSL - Bluescope Steel

[Julia]

I haven't been following this thread, but are you taking into account how disadvantaged BSL (and probably OST for that matter) will be if Ms gillard's carbon tax is legislated?
The Chairman of BSL - and member of the Reserve Bank Board, Graham Kraehe, has slammed the government on this.

http://www.abc.net.au/news/stories/2011/03/23/3171207.htm?section=justin

 

[tonics]

Thanks Julia, hoping it may be a sell the rumour and buy the fact scenario after given the steep declines.

I haven't been following this thread, but are you taking into account how disadvantaged BSL (and probably OST for that matter) will be if Ms gillard's carbon tax is legislated?
The Chairman of BSL - and member of the Reserve Bank Board, Graham Kraehe, has slammed the government on this.

http://www.abc.net.au/news/stories/2011/03/23/3171207.htm?section=justin

 

[Aussiejeff]

Looking at charts over the last year on BSL and OST, both have been on the decline, however BSL seems to have bounces of 10-20% moves at times throughout the last year, while OST has just been on a continual grind downwards.
Over the last few years, since 2008, OST has always seemed the more fundamentally stronger company out of the 2, and as mentioned is at least profitable with a stronger outlook for the future, but just can't seem to shake off the decline.
Currently holding losses in both these companies, inclinations are to cut losses on BSL and move to OST as the stronger company fundamentally, but past history has shown BSL to have the greater tendency for rebounds.
Any opinions on this, or any chartists who may have some input about this?

IMO while Green Labour continues in power, the future for steel manufacturers looks bleak. Check out the accelerating decline in BSL share price since Carbon Tax announced.... courtesy of .... http://www.sunriseadvice.com.au/2011-predictions-update/dutch-disease-update

 

[edwin888]

Are there still any hopes for Bluescope Steel's future trend?

 

[skc]

Are there still any hopes for Bluescope Steel's future trend?

Some rumours on possible tie up between BSL and OneSteel.

Not sure who's taking over who, or may be a merger of equals?

http://www.businessspectator.com.au...0817-KSSQN?OpenDocument&emcontent_wheelsdeals

Australia’s two big steelmakers – BlueScope Steel and OneSteel – have never had it so tough, with a strong Australian dollar, higher raw material costs and low margins cutting into their value. Bluescope got the ball rolling last week, flagging a $900 million write-down and possible job cuts at its Port Kembla operations, and OneSteel’s full-year profit numbers didn’t make happy reading either. The company posted a 6 per cent drop in underlying full-year profit and is set to cut steel production and more than 400 workers. The local manufacturing division was a particular disappointment as it slumped to a $185 million loss, but the one big positive for OneSteel was its iron ore mining business. With both steelmakers under the pump, it’s hardly surprising that talk of the two tying the knot (combining BlueScope’s bigger Port Kembla blast furnaces with OneSteel's iron ore supply) at some stage have grown stronger in recent times. While OneSteel boss Geoff Plummer has hosed down speculation of an imminent tie-up he hasn’t ruled it out, especially if conditions continue to deteriorate. Plummer’s reticence about the merger stems from the fact that the two businesses are very different and he has a point. OneSteel has a far greater exposure to a turnaround in domestic steel demand and focuses on building long products used in construction and infrastructure sectors, while BlueScope specialises in hot-rolled coil and coated steels, which it sells to export markets. The issue might not be as cut and dry as combining the blast furnaces of the two steelmakers but consolidation may be the key to surviving the tough market conditions, especially if the world is headed for a lengthy slowdown. OneSteel’s latest results have been largely boosted by iron ore sales with the core steel-making business in trouble. The tipping point for OneSteel’s Plummer could come down to the Australian dollar, which is widely expected to continue outperforming the greenback in the near-term. With a resurgent dollar and the domestic steel business facing significant headwinds, a merger could still very much be on the cards.

 

[skyQuake]

Some rumours on possible tie up between BSL and OneSteel.

Not sure who's taking over who, or may be a merger of equals?

Or more like blind leading the blinddd

BSL never really got out of the GFC

 

[skc]

Or more like blind leading the blinddd

BSL never really got out of the GFC

Well at least there might be some savings from having only one board and management team...

Exporting a commodity product like steel from a high cost country like Australia isn't a recipe for great profits.

I always thought the investment bankers dream up these random ideas just to sow the seed into the minds of the board and CEOs. A bit like Inception...

 

[McLovin]

Exporting a commodity product like steel from a high cost country like Australia isn't a recipe for great profits.

And yet the mining industry will tell us that the good times will roll on for decades.

 

[skc]

And yet the mining industry will tell us that the good times will roll on for decades.

Lol. Let me clarify... exporting a manufactured commodity product, which can also be manufactured anywhere else in the world, from a high cost country like Australia isn't a recipe for great sustainable profits.

Mining resources are different because they are found where they are found.

 

[edwin888]

Does anyone think that it is a low price to buy now before it bounds up?

 

[McLovin]

Lol. Let me clarify... exporting a manufactured commodity product, which can also be manufactured anywhere else in the world, from a high cost country like Australia isn't a recipe for great sustainable profits.

Mining resources are different because they are found where they are found.

I agree, and my comment was very much tongue-in-cheek, although I don't think the returns in the iron/coal industry are sustainable. OST/BSL are toast, whether or not there is a carbon tax, IMO.

 

[Tysonboss1]

And yet the mining industry will tell us that the good times will roll on for decades.

The production of steel and the mining of raw materials are very different.

Just like owning an oil field is very different from owning an oil refinery.

 

[skc]

I agree, and my comment was very much tongue-in-cheek, although I don't think the returns in the iron/coal industry are sustainable. OST/BSL are toast, whether or not there is a carbon tax, IMO.

Yes I get the tongue-in-cheek-ness and hence the lol

It's hard to see how they can turn it around. Steel making has always been a cyclical industry (to go with the construction cycle) but there are structural changes that are simply overwhelming for all players.

 

[edwin888]

Looks like Bluescope Steel's share price keep dropping and will never go up again.
Is it still the ASX 50 leaders?

 

[skc]

Is it still the ASX 50 leaders?

How does this affect your decision to buy/hold/sell?

 

[edwin888]

How does this affect your decision to buy/hold/sell?

Just wonder will Bluescope Steel got kick out from ASX 50 leaders as its price dropping seems to be never end.

 

[skc]

Just wonder will Bluescope Steel got kick out from ASX 50 leaders as its price dropping seems to be never end.

Sure why not. But what has that got to do with your investment decision? Do you have a rule that says you will only invest in ASX 50?

An inclusion / exclusion in ASX200 can sometimes impact the share price in the short term as a stock becomes investable / non-investable to many mutual funds. But I suspect the impact of being ASX 50 would be rather minimal.

 

[notting]

Unfortunatly it's difficult to see how their going to servive.
Some big international fund investors let stocks goe that fall below $1 which creates a bit of a snowball too.

 

[kat]

Unfortunatly it's difficult to see how their going to servive.
Some big international fund investors let stocks goe that fall below $1 which creates a bit of a snowball too.

Agree, seems the big institutions are selling the stock.

 

[edwin888]

9% dropped today...it is the time to buy or gonna drop more on Monday as the report release.