The growing demand for steel across key markets and output cuts by the world’s largest producer, China, combined is driving steel prices to record highs. Hence, quality steel stocks Nucor (NUE), Ternium (TX), Reliance Steel & Aluminum (RS), and Commercial Metals (CMC) should witness plenty of upsides in the upcoming months.The steel industry has witnessed a solid recovery due to rising demand from increasing industrial activity and construction projects over the past few months. This, combined with the world’s largest steel producer China’s curb on output to reduce carbon emissions, is driving steel prices higher. China’s production cuts will likely continue in the second half, creating a big supply crunch and keeping the market red hot.
On the other hand, the Senate’s passage of the $1 Trillion Infrastructure Bill, which allotted $550 billion to improve and develop America's infrastructure over the next five years, should add to steel demand.
Given this healthy global demand and rising prices, it could be wise to bet on fundamentally sound steel stocks Nucor Corporation (NYSE:NUE), Ternium S.A. (TX), Reliance Steel & Aluminum Co. (RS), and Commercial Metals Company (NYSE:CMC).