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There's some good and more than some bad in the steel industry, and Eoin Tracey of Fullermoney analyzes all of it for you.

More than a few of the reports that have crossed my desk are predicting continued oversupply in China's coking coal sector.

Coal miners have experienced a significant headwind as natural gas displaced coal in the US utility sector, which freed up supply for export. Concurrently, demand for steel and coking coal has been sapped by Europe's lengthy recession and China's change of focus from infrastructure development to fostering human capital.

As a result, a high degree of variability is now evident in the steel sector. Arcelor Mittal (MT) is representative of the downward pressure on steel prices. The shares trended lower for three months from late January, before finding support near €8.50 three weeks ago. They have since rallied to break the progression of lower rally highs, as they close the overextension relative to the 200-day MA.

Vertically integrated steel producers, such as Russia's Evraz (EVRZF) and Brazil's Cia Siderurgica Nacional (Brazil: CSNA3), have been particularly weak, and remain deeply oversold relative to their respective 200-day MAs.

Specialty steel producers have tended to outperform, not least because they occupy niches within the sector that offer security to earnings. Worthington Industries (WOR), for instance, produces canisters for compressed gases, not least for CNG vehicles, among a wider range of other products.

Worthington shares broke out of an almost 20-year base in January, and continue to extend the advance. A break in their progression of higher reaction lows would be required to begin to question medium-term upside potential.

US-listed Nucor (NUE) has benefited from the US' competitive position in energy pricing. It found support three weeks ago in the region of the 200-day MA.

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Tickers Mentioned: Tickers: EVRZF, MT, WOR, NUE

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