(Bloomberg) -- U.S. steelmakers dropped after the price of a core product fell below a key level for the first time in 19 months, adding to a list of woes facing the industry.
AK Steel Holding Corp. saw the biggest decline among its main peers on Tuesday, declining as much as 12%, after the price for hot-rolled coil steel dipped below $600 a short ton for the first time since October 2017. The product traded at $920 in July.
“Lots of negative sentiment out there,” said Richard Bourke, an analyst for Bloomberg Intelligence, who compared the $600 mark to a round number like 10,000 for the Dow Jones Industrial Average. “There are growing concerns about a slowing global market.”
The steel industry is facing a double whammy of falling prices and rising costs for iron ore. There are also concerns about the strength of the global economy, especially demand for cars and trucks -- AK’s largest market -- and the U.S. lifted 25% tariffs on steel imports from Canada and Mexico earlier this month. AK also has the one of the highest levels of debt in the industry, often causing its shares to be more volatile in an uncertain market, according to Tyler Kenyon, an analyst for Cowen & Co.
Kenyon described the steel prices as having an “unforeseeable bottom.”
AK fell 3.5% to $1.92 at 1:05 p.m. in New York after hitting a more than three-year low. The West Chester, Ohio-based producer was the worst performer in the 13-member S&P Supercomposite Steel Index, which slumped 0.4%.