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4 Steel Stocks Set to Gain on Spurred Up Demand in 2021
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The steel industry in the United States now seems poised to make a comeback from the COVID-19 led slump during the earlier part of last year. Demand for the metal is gradually returning as manufacturers are springing to action. Notably, increased demand has led to higher steel prices. Per S&P Global Platts, the benchmark price for hot-rolled steel hit a two-year high of $900 per ton in December 2020, as mentioned in a Wall Street Journal article.
Moreover, the American Iron and Steel Institute reported that in the week ending Jan 2, production increased 3.1% from the week ending Dec 26, 2020. Capacity utilization also improved to 80.1% from the previous week’s capacity utilization of 72.3%. Although weekly productions were down on a year-over-year basis, the uptick in production from the prior holiday-induced week bodes well.
Reflective of the uptick in demand for steel, manufacturing activity has also been expanding in the United States. Per the latest report from the Institute for Supply Management, the purchasing manager’s index for December was 60.7% compared to 57.5% in November, marking the eighth consecutive month of growth.
Meanwhile, the World Steel Association (“worldsteel”) also forecast in a report that global demand for steel will rise 4.1% in 2021 following an estimated slump of 2.4% in 2020. Moreover, worldsteel predicted that demand for steel in the United States should increase 6.6% in 2021 following an estimated drop of 15.8% in 2020.
Separately, global production of light vehicles is expected to rebound in 2021. This rebound will be important because the automotive industry is a major contributor to demand for steel. Notably, IHS Markit estimated global light vehicle production to rebound 14% to 84.3 million units in 2021, following an estimated dip of 17% in 2020, as quoted in a Business Wire article. The article further mentioned that in North America, IHS Markit forecast a production increase of 29% on a year-over-year basis for the remainder of 2021 following a cautious view of the first quarter.
4 Steel Stocks to Buy Now
The outlook for the demand for steel is gradually improving. Steel prices have witnessed an uptick and reflective of the rising demand, manufacturing activity has also continued to expand. Meanwhile, production of light vehicles is also expected to rebound in 2021, a development that bodes well for the steel industry. This makes it a good time to invest in steel stocks that stand to benefit from this improved outlook. We have selected four such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ArcelorMittal (MT - Free Report) , along with its subsidiaries, owns and operates steel manufacturing and mining facilities in Europe, North and South America, Asia, and Africa. The company sells its products to various customers in the automotive, appliance, engineering, construction, energy and machinery industries through a centralized marketing organization, as well as distributors. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 62.2% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
Schnitzer Steel Industries, Inc. recycles ferrous and nonferrous scrap metals; and manufactures finished steel products worldwide. Under the Cascade Steel and Scrap segment, the company provides semi-finished goods, which include billets; and finished goods consisting of rebar, coiled rebar, wire rods, merchant bars, and other specialty products. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 52.8% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
Ryerson Holding Corporation (RYI - Free Report) , along with its subsidiaries, processes and distributes industrial metals in the United States, Canada, Mexico and China. The company offers a line of products in carbon steel, stainless steel, alloy steels and others. It currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 35% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
Olympic Steel, Inc. (ZEUS - Free Report) processes and distributes metal products in the United States and internationally. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 77.4% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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4 Steel Stocks Set to Gain on Spurred Up Demand in 2021
The steel industry in the United States now seems poised to make a comeback from the COVID-19 led slump during the earlier part of last year. Demand for the metal is gradually returning as manufacturers are springing to action. Notably, increased demand has led to higher steel prices. Per S&P Global Platts, the benchmark price for hot-rolled steel hit a two-year high of $900 per ton in December 2020, as mentioned in a Wall Street Journal article.
Moreover, the American Iron and Steel Institute reported that in the week ending Jan 2, production increased 3.1% from the week ending Dec 26, 2020. Capacity utilization also improved to 80.1% from the previous week’s capacity utilization of 72.3%. Although weekly productions were down on a year-over-year basis, the uptick in production from the prior holiday-induced week bodes well.
Reflective of the uptick in demand for steel, manufacturing activity has also been expanding in the United States. Per the latest report from the Institute for Supply Management, the purchasing manager’s index for December was 60.7% compared to 57.5% in November, marking the eighth consecutive month of growth.
Meanwhile, the World Steel Association (“worldsteel”) also forecast in a report that global demand for steel will rise 4.1% in 2021 following an estimated slump of 2.4% in 2020. Moreover, worldsteel predicted that demand for steel in the United States should increase 6.6% in 2021 following an estimated drop of 15.8% in 2020.
Separately, global production of light vehicles is expected to rebound in 2021. This rebound will be important because the automotive industry is a major contributor to demand for steel. Notably, IHS Markit estimated global light vehicle production to rebound 14% to 84.3 million units in 2021, following an estimated dip of 17% in 2020, as quoted in a Business Wire article. The article further mentioned that in North America, IHS Markit forecast a production increase of 29% on a year-over-year basis for the remainder of 2021 following a cautious view of the first quarter.
4 Steel Stocks to Buy Now
The outlook for the demand for steel is gradually improving. Steel prices have witnessed an uptick and reflective of the rising demand, manufacturing activity has also continued to expand. Meanwhile, production of light vehicles is also expected to rebound in 2021, a development that bodes well for the steel industry. This makes it a good time to invest in steel stocks that stand to benefit from this improved outlook. We have selected four such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ArcelorMittal (MT - Free Report) , along with its subsidiaries, owns and operates steel manufacturing and mining facilities in Europe, North and South America, Asia, and Africa. The company sells its products to various customers in the automotive, appliance, engineering, construction, energy and machinery industries through a centralized marketing organization, as well as distributors. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 62.2% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
Schnitzer Steel Industries, Inc. recycles ferrous and nonferrous scrap metals; and manufactures finished steel products worldwide. Under the Cascade Steel and Scrap segment, the company provides semi-finished goods, which include billets; and finished goods consisting of rebar, coiled rebar, wire rods, merchant bars, and other specialty products. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 52.8% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
Ryerson Holding Corporation (RYI - Free Report) , along with its subsidiaries, processes and distributes industrial metals in the United States, Canada, Mexico and China. The company offers a line of products in carbon steel, stainless steel, alloy steels and others. It currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 35% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
Olympic Steel, Inc. (ZEUS - Free Report) processes and distributes metal products in the United States and internationally. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 77.4% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>