Steel Bears Growl after the ‘T’ Word Rattles Markets



Steel stocks

Steel stocks fell yesterday, with U.S. Steel Corporation (X) and AK Steel (AKS) falling 2.7% and 2.0%, respectively, Nucor (NUE) falling 1.9%, and Steel Dynamics (STLD) falling 2.0%. The Dow Jones Industrial Average (DIA) fell 1.1%. US steel stocks are having a tough time this year despite Section 232 tariffs lifting benchmark hot rolled coil prices to a decade high.

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Steel bears

Donald Trump’s tariffs have rattled markets, and metal stocks have borne the brunt. Along with steel, aluminum stocks fell yesterday. As trade tension escalates and uncertainty over Section 232 tariffs persists, some brokerages have turned bearish on steel stocks.

On May 30, Goldman Sachs downgraded AK Steel from “neutral” to “sell,” and lowered its price target from $6 to $4, and on June 14, Philip Gibbs of KeyBanc downgraded Steel Dynamics from “overweight” to “sector weight.” Bank of America Merrill Lynch has now downgraded Commercial Metals from “neutral” to “underperform,” and prefers Nucor and Steel Dynamics over Commercial Metals. In the next article, we’ll see why steel bulls have taken a backseat.


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