Originally, Trump said that he would spend more than $500 billion—twice what Hillary Clinton was looking to allocate—in the infrastructure sector. Investments in bridges, highways, and airports would boost demand for metals like steel. However, U.S. Steel Corporation (X) doesn’t have major exposure to construction grade steel products. Notably, the non-residential construction industry mainly uses products like rebar, structural, and plates, while U.S. Steel only produces flat-rolled steel products.
Having said that, this doesn’t mean that U.S. Steel wouldn’t benefit from Trump’s proposed economic policies. First, higher US steel demand combined with Trump’s tough stance on imports bodes well for US steel prices. Higher US steel prices would benefit all US-based steelmakers including Steel Dynamics (STLD), Nucor (NUE), and AK Steel (AKS).
Hillary Clinton, like President Obama, claimed to be a big advocate of renewable energy. She boasted that there would be 500 million solar panels by 2020 if she was elected. On the other hand, Trump claimed that he would throw his weight behind coal and shale gas.
U.S. Steel’s Tubular segment posted massive losses for the past few quarters, as you can see in the above graph. Demand for tubular goods that are used by the energy industry fell. New exploration activity has been hit due to lower energy prices.
Trump’s apparent support of non-renewable energy would likely be positive for U.S. Steel. Trump’s support for the Keystone XL pipeline could boost the demand for U.S. Steel’s tubular products. However, it’s important to remember that last year, Republicans blocked an amendment that required only US-made steel be used in the pipeline.
In the next part, we’ll see how analysts rate ArcelorMittal (MT).