I think the following may have had some influence on stelco stock
U.S. Steel slides as new mill sparks capacity concerns
U.S. Steel (X -7.9%) nears a two-month low on worries that the company's planned addition of a new steel mill will disrupt the current favorable supply and demand environment, eventually applying downward pressure to steel prices.
Other domestic steel names also trade sharply lower: CLF -4.3%, NUE -4.2%, STLD -2.5%, SCHN -2.3%.
While U.S. Steel says its goal is to "build capacity to get better, not bigger," the new mill - which is expected to produce 3M tons/year of flat-rolled steel products - will increase its sheetsteel production capacity by ~20% and raise new production capacity under construction or planned in the U.S. to 12M tons/year.
According to Bloomberg, Morgan Stanley's Carlos de Alba thinks the new electric arc furnace "may be a good investment" compared to deploying existing blast furnace assets, "but it would consume all the free cash flow we currently model" from Q1 2022 to Q2 2024, as well as cause "concerns about a potentially oversupplied market with negative implications for steel prices."
Credit Suisse's Curt Woodworth expects an initial negative reaction from investors due to the hit to free cash flow yields and broader market concerns about excess capacity in the U.S. sheet market, but "we continue to believe the market is significantly underestimating the earnings power" for U.S. Steel in 2022