Shareholders in BlueScope Steel Limited (ASX: BSL) have been on a bumpy ride. After trading around $5 for much of the past three years, shares plummeted in recent months to a 52-week low of $3.61 back in April.
The shares then gradually fell even further, reaching a low of $2.70 before their big turnaround to $3.68 yesterday.
What gives?
Well there's been no substantial announcements recently, although the amount of shares that changed hands yesterday was 15 million, three times the usual average. The last time that many shares were sold on a single day was after the full-year report was released in September 2014.
There are a few reasons to explain the rise – fund manager Ausbil Investment Management Limited recently increased its holdings from 5.06% to 6.19% of BlueScope, which may have encouraged other investors.
Given high short-selling interest in BlueScope it's also possible that short sellers have been buying shares to exit their position.
A number of brokers also have 'Buy' targets on BlueScope with prices far above their current level – Deutsche Bank analysts think it's worth $5.68 per share.
However, another reason also presents itself; BlueScope has been in the news recently regarding a possible shutdown of its remaining blast furnace in Wollongong, an operation that has been gradually wound down in recent years due to poor profitability.
With shareholders demanding a renewed focus on sustainable returns, if a shutdown appeared likely that could also encourage prices to rise.
Although there has been no indication either way as yet, I personally feel that the high volume and dramatic swing in prices points to the activities of more significant investors who may think an exit from Wollongong is quite likely.
Neither BlueScope nor rival steelmaker Arrium Ltd (ASX: ARI) operates in a particularly appealing sector, as there are too many different pressures and not enough potential for sustainable growth to satisfy a truly Foolish investor.