It’s said that steel is the backbone of an economy. This isn’t an exaggeration looking at the role steel plays in our daily life, as well as the economy. Take a look around and you will see your car, home, household appliances, and roads. Everything is made with this humble metal. It also plays a large role in our economy, directly and indirectly supporting a million jobs in the United States.
Steel consumption in the U.S.
The steel produced by the mills acts a raw material for several industries. The previous chart shows the steel consumption by major industries in the U.S. Construction and auto are the two biggest consumers, followed by energy. We’ll discuss the outlook for these industries in greater detail going forward.
The dynamics of steel companies
Steel companies had a terrible time after the recession of 2008. Steel prices fell, output stagnated, and whenever demand started looking up, foreign trading partners made the most of it with cheap imports to the United States. This made any recovery doubtful in this industry. Now let’s analyze the recent developments in the steel industry.
What has changed for steel companies?
Steel stocks were out of favor until almost a year ago because no one was sure whether it made sense to hold on to an industry that was losing money. However, stock markets have finally found its place in the industry. Some companies have seen their share prices more than double in past year. We’ll discuss this in detail in the following sections in this series.
Steel companies in the U.S.
Arcelor Mittal ADR (MT), United States Steel Corporation (X), Nucor Corporation (NUE), and Steel Dynamics (STLD) are major steel companies listed in the U.S. These companies benefit directly from any positive movement in the steel industry. Along with these companies, exchange-traded funds (or ETFs) like the SPDR S&P Metals and Mining ETF (XME) are also an alternative way to gain exposure to the steel industry.