Boston, MA 01/30/2014 (wallstreetpr) – Towards the end of last year when Peabody Energy Corporation (NYSE:BTU) published its quarterly results, it was evident that the company had not fared as well as analysts had predicted. The reason for this was put down to the poor demand for steel that currently exists in both Europe and the US. Nothing seems to have changed since then, and if this worrying trend continues, the investors in BTU should get ready for a potentially tougher 2014 than they envisaged when 2013 drew to an end, and looked to the new year full of hope of better times.
Peabody does not need the demand for steel to pick up. It needs the process of steel to shoot up and remain there for much longer and probably during the entire course of 2014. Perhaps this is the only way in which the situation at BTU will change for good and benefit all its investors this year. Remember that 2013 was a lackluster year on many fronts for stocks such as Peabody, which together with others that depend on steel for survival, such as AK Steel and US Steel, suffered huge losses. Investors may be unable to take another prolonged hit in 2014 if it happens.
Steel prices in both China and Europe are currently lower, and not at par with those in the US. If the global economy does well in 2014, there is a good chance that the prices in those two regions will rise, and at least reach the levels seen in the US. If this happens, then companies such as BTU will see a huge upturn in their fortunes this year, which will be great news for investors in this stock. However, not many analysts and experts in matters to do with steel are optimistic that this will happen in 2014, and only see a continuation of what took place in 2014.
The steel industry often acts as a gauge of the health of the global economy. If the economy is doing well, the same will happen within the industry. If there is a problem with the industry, and demand is poor, this often points to the fact that the global economy is struggling and not doing as well as many would like. The steel industry is a $500 billion a year industry and Peabody has a substantial market share here. While the company does not depend entirely on steel, being that it operates a private sector coal business, it nevertheless endures torrid times when steel suffers.
While the economic situation in US has improved somewhat, the same cannot be said with regard to Europe and Asia, which Peabody needs to post better financial results in 2014. Current reports indicate that Europe may be on the verge of economic recovery, but until that happens, it is safe to say that BTU still has a long way to go, to reverse the losses of 2013, and make 2014 a year full of positive news, growth, increased revenue, and greater dividends for its investors and Wall Street alike.
