What a year 2016 was for steel stocks (XME). U.S. Steel (X) and AK Steel (AKS) rose more than 300% in the year. ArcelorMittal (MT), the world’s largest steel company, also saw significant upwards price action last year.
The steel industry’s 2016 performance was a welcome break for investors who had seen their holdings fall since late 2014. Notably, U.S. Steel and ArcelorMittal lost more than 60% of their respective market capitalizations in 2015. Nucor (NUE) also ended 2015 with losses of ~18%.
Though steel stocks gained substantially during the year, it wasn’t a smooth ride. Steelmakers saw their fortunes change several times in 2016. However, Trump’s election turned out to be a game changer. Steelmakers saw upward price action after Trump’s win. The market’s reaction to the election results wasn’t surprising given Trump’s stance on curbing imports and boosting US manufacturing. Read Weighing Trump’s Mettle: Will He Be a Game Changer for US Steel? to find out what a Trump presidency could mean for steel stocks.
Now, with 2016 behind us, investors are wondering whether steel stocks will continue their good run in 2017 or if we could see a pullback from these levels. In this series, we’ll look at the US steel industry’s 2017 outlook and explore how steel prices could play out in the year. We’ll also look at the key developments that steel investors should watch for in 2017.
Let’s begin by looking at steel companies’ 2016 performance in the next article.