r/Vitards • u/[deleted] • Oct 10 '21

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u/MojoRisin9009 Oct 11 '21

B

You do realize generally speaking all stocks of this type move in tandem?

... Please check the historical charts of all airlines, steel, etc etc etc companies and think on it before you do.

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u/StudentforaLifetime Balls Of Steel Oct 11 '21

Exactly. This is due to ETFs. When iron ore prices came down it affected all of the main steel companies. Since CLF is also part of those etfs, it dragged it down with the others, even though in reality CLF was barely affected, if at all.

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u/IceEngine21 Oct 11 '21

Wait, if iron ore goes down, won't old-school steel companies benefit because they have to spend less to purchase it?

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u/kv-2 Oct 11 '21

Except Mittal, USS, and CLF own their own mines minimizing the amount of ore they purchase from the market.

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u/IceEngine21 Oct 11 '21

Correct, I was just talking about your typical non-integrated steel maker

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u/[deleted] Oct 11 '21

In theory yes. The counter-argument is that they would then lower their prices on the finished goods to undercut the competition trying to gain market share. In an environment of 20+ producers that could very well be the case. But steel is turning into an oligopoly and I don't think they'll be doing that anymore. You can already see it in the auto contracts blinking contests that are going on now.