- Steel shares are mostly lower for the second straight session after Pres. Trump's tariffs on steel imports include exemptions for Canada and Mexico with possibly more countries still to come: X -2.7%, AKS -4.4%, NUE -0.9%, MT -1.2%, STLD +0.1%, WOR +0.3%, RS +0.4%, CMC +1%.
- Nevertheless, Cowen's Navid Rassouli sees upside for the steel group, given that shares are trading at a discount to current spot steel prices; he likes the fact that the tariffs exempt Canada and Mexico, believing it will mean less disruption and panic from U.S. buyers, "enabling the changes to likely be digested more easily by the market."
- The American Iron and Steel Institute reported that U.S. weekly capability utilization climbed to 78.7% - the highest since early 2015 - in the week ending March 3, and CFRA analyst Matthew Miller expects utilization to rise even further, topping 80%, a level he believes is “healthy for the domestic steel industry” and would also be a “benchmark the U.S. has not reached since before the Great Recession in 2008.”
- “Anytime the U.S. general economy grows by nearly 3% GDP, steel benefits,” notes Joseph Innace, S&P Global Platts’ editorial director for metals Americas.
- ETF: SLX
- Now read: The Best DRIP Stocks: 15 No-Fee DRIP Dividend Aristocrats (Video)
Original article