Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Bottom-Up

<ul>
<li>
Context: The <a href="https://www.smartkarma.com/entities/nucor-corp" target="_blank" data-smartkarma-citation="entities:3984:1" rel="noopener">Nucor Corp (NUE US)</a> vs. <a href="https://www.smartkarma.com/entities/steel-dynamics-inc" target="_blank" data-smartkarma-citation="entities:11061:1" rel="noopener">Steel Dynamics (STLD US)</a> price ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.</li>
<li>
 Highlight: Going long <a href="https://www.smartkarma.com/entities/steel-dynamics-inc" target="_blank" data-smartkarma-citation="entities:11061:1" rel="noopener">Steel Dynamics (STLD US)</a> and short <a href="https://www.smartkarma.com/entities/nucor-corp" target="_blank" data-smartkarma-citation="entities:3984:1" rel="noopener">Nucor Corp (NUE US)</a> targets a 4% return.</li>
<li>
Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.</li>
</ul>



Context: The Nucor Corp (NUE US) vs. Steel Dynamics (STLD US) price ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.

 Highlight: Going long Steel Dynamics (STLD US) and short Nucor Corp (NUE US) targets a 4% return.

Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.


Steel Dynamics (STLD US) Vs Nucor (NUE US): Steel Rivals Forge a Pair Trade

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bluescope-steel-ltd" target="_blank" data-smartkarma-citation="entities:207:1" rel="noopener">Bluescope Steel (BSL AU)</a> has disclosed a revised non-binding proposal from <a href="https://www.smartkarma.com/entities/sgh-limited" target="_blank" data-smartkarma-citation="entities:803:1" rel="noopener">SGH Limited (SGH AU)</a> and <a href="https://www.smartkarma.com/entities/steel-dynamics-inc" target="_blank" data-smartkarma-citation="entities:11061:1" rel="noopener">Steel Dynamics (STLD US)</a> at US$32.35. Adjusting for dividends, the equivalent offer is A$34.00. </li>
<li>It is the best and final proposal. The offer does not fully address the Board’s reasons for rejecting the previous offer, but it will pressure the Board to engage. </li>
<li>AustralianSuper, the largest shareholder, holds the key vote. If AustralianSuper does not increase its shareholding in the coming days, it signals that it is supportive.</li>
</ul>



Bluescope Steel (BSL AU) has disclosed a revised non-binding proposal from SGH Limited (SGH AU) and Steel Dynamics (STLD US) at US$32.35. Adjusting for dividends, the equivalent offer is A$34.00. 
It is the best and final proposal. The offer does not fully address the Board’s reasons for rejecting the previous offer, but it will pressure the Board to engage. 
AustralianSuper, the largest shareholder, holds the key vote. If AustralianSuper does not increase its shareholding in the coming days, it signals that it is supportive.


BlueScope Steel (BSL AU): SGH and Steel Dynamics’ Best and Final Offer

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bluescope-steel-ltd" target="_blank" data-smartkarma-citation="entities:207:1" rel="noopener">Bluescope Steel (BSL AU)</a> confirmed that on 12 December, it received a non-binding proposal from <a href="https://www.smartkarma.com/entities/sgh-limited" target="_blank" data-smartkarma-citation="entities:803:1" rel="noopener">SGH Limited (SGH AU)</a> and Steel Dynamics at US$30.00, a 22.7% premium to last close.</li>
<li>The offer is the latest of three previous offers from <a href="https://www.smartkarma.com/entities/steel-dynamics-inc" target="_blank" data-smartkarma-citation="entities:11061:1" rel="noopener">Steel Dynamics (STLD US)</a> that the Board rejected as significantly undervaluing BlueScope and having regulatory approval issues.</li>
<li>The statement strongly suggests that this offer will share a similar fate. While representing a ten-year high, the offer is light compared to peer multiples. </li>
</ul>



Bluescope Steel (BSL AU) confirmed that on 12 December, it received a non-binding proposal from SGH Limited (SGH AU) and Steel Dynamics at US$30.00, a 22.7% premium to last close.
The offer is the latest of three previous offers from Steel Dynamics (STLD US) that the Board rejected as significantly undervaluing BlueScope and having regulatory approval issues.
The statement strongly suggests that this offer will share a similar fate. While representing a ten-year high, the offer is light compared to peer multiples. 


BlueScope Steel (BSL AU): SGH and Steel Dynamics’ Non-Binding Offer Likely to Be Knocked Back

Global Materials | Industrials | Commodities

Rahul Jain

Nippon Steel Corporation / Equity Bottom-Up

<ul>
<li>FY26–30 plan lifts scale ambitions, but ¥6 tn capex and U.S. Steel integration keep free cash flow negative through FY26.</li>
<li>U.S. Steel synergies shift to FY27–28 amid labor, regulatory, and spread pressures, delaying ROCE recovery toward the 9–10% target.</li>
<li>Look cheap on NTM multiples, but elevated leverage, FX sensitivity, and sub-8% forward ROCE limit near-term re-rating.</li>
</ul>


FY26–30 plan lifts scale ambitions, but ¥6 tn capex and U.S. Steel integration keep free cash flow negative through FY26.
U.S. Steel synergies shift to FY27–28 amid labor, regulatory, and spread pressures, delaying ROCE recovery toward the 9–10% target.
Look cheap on NTM multiples, but elevated leverage, FX sensitivity, and sub-8% forward ROCE limit near-term re-rating.


Nippon Steel: Ambition Raised, Returns Deferred

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>POSCO has signed a strategic partnership with Cleveland-Cliffs. POSCO is likely to invest more than 1 trillion won to purchase at least a 10% stake in Cleveland-Cliffs by early 2026.</li>
<li>Local media have mentioned that POSCO is likely to invest more than 1 trillion won (US700 million) to purchase at least a 10% stake in Cleveland-Cliffs by 2026.</li>
<li>Overall, we believe that a potential US$700 million investment in Cleveland-Cliffs for about 10% stake in the company could have a positive impact on POSCO.</li>
</ul>


POSCO has signed a strategic partnership with Cleveland-Cliffs. POSCO is likely to invest more than 1 trillion won to purchase at least a 10% stake in Cleveland-Cliffs by early 2026.
Local media have mentioned that POSCO is likely to invest more than 1 trillion won (US700 million) to purchase at least a 10% stake in Cleveland-Cliffs by 2026.
Overall, we believe that a potential US$700 million investment in Cleveland-Cliffs for about 10% stake in the company could have a positive impact on POSCO.


POSCO: Signs a Strategic Partnership with Cleveland-Cliffs

United States

Cleveland-Cliffs Inc. is an American iron ore mining company. The Company supplies iron ore pellets, lumps and fines to blast furnaces in the global steel industry. Cliffs is in the process of expanding its customer base to Electric Arc Furnaces.

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Cleveland-Cliffs Inc (CLF US)

Steel Dynamics (STLD US) Vs Nucor (NUE US): Steel Rivals Forge a Pair Trade

Highly correlated US steel rivals diverge, forging a fresh pair trade opportunity. Essential for quantitative traders seeking mean-reversion...

Gaudenz Schneider

BlueScope Steel (BSL AU): SGH and Steel Dynamics’ Best and Final Offer

The offer does not fully address the Board’s reasons for rejecting the previous offer, but it will pressure the Board to engage. AustralianSuper...

Arun George

BlueScope Steel (BSL AU): SGH and Steel Dynamics’ Non-Binding Offer Likely to Be Knocked Back

The statement strongly suggests that this offer, like the previous three, will be rejected. While representing a ten-year high, the offer is light...

Arun George

Nippon Steel: Ambition Raised, Returns Deferred

Despite ambitious scale ambitions and U.S. Steel integration, negative free cash flow is projected through FY26 due to capex etc., delaying ROCE...

Rahul Jain

POSCO: Signs a Strategic Partnership with Cleveland-Cliffs

POSCO has signed a strategic partnership with Cleveland-Cliffs. POSCO is likely to invest more than 1 trillion won to purchase at least a 10% stake...

Douglas Kim

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Steel Dynamics (STLD US) Vs Nucor (NUE US): Steel Rivals Forge a Pair Trade

Highly correlated US steel rivals diverge, forging a fresh pair trade opportunity. Essential for quantitative traders seeking mean-reversion...

Gaudenz Schneider

BlueScope Steel (BSL AU): SGH and Steel Dynamics’ Best and Final Offer

The offer does not fully address the Board’s reasons for rejecting the previous offer, but it will pressure the Board to engage. AustralianSuper...

Arun George

BlueScope Steel (BSL AU): SGH and Steel Dynamics’ Non-Binding Offer Likely to Be Knocked Back

The statement strongly suggests that this offer, like the previous three, will be rejected. While representing a ten-year high, the offer is light...

Arun George

Nippon Steel: Ambition Raised, Returns Deferred

​Despite ambitious scale ambitions and U.S. Steel integration, negative free cash flow is projected through FY26 due to capex etc., delaying ROCE...

Rahul Jain

POSCO: Signs a Strategic Partnership with Cleveland-Cliffs

POSCO has signed a strategic partnership with Cleveland-Cliffs. POSCO is likely to invest more than 1 trillion won to purchase at least a 10% stake...

Douglas Kim

Despite ambitious scale ambitions and U.S. Steel integration, negative free cash flow is projected through FY26 due to capex etc., delaying ROCE...