Steel shares climb on rebound projections

Shares of steel manufacturers have surged after a JPMorgan analyst forecast a continued rebound in steel prices fuelled by higher materials costs and some improvement in demand.

JPMorgan analyst Michael Gambardella said: "Given the increased demand, cost pressures and still tight supply situation, we think announced price increases will stick and expect to see more before the spring." He raised price targets and earnings estimates for AK Steel Holding, United States Steel and ArcelorMittal.

Gambardella said that steel producers, who were hit hard with the decline in construction and auto manufacturing among other industries, have announced price hikes for this year that are expected to boost hot-rolled sheet prices to a range of $550 to $580 a tonne by February.

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