Steel industry due for a bounce, led by Nucor, Seaport analyst says

|By:, SA News Editor

U.S. policy uncertainty and recent declines in forward steel pricing have outweighed the bullish outlook for long-term global steel demand, but Seaport Global analyst Derek Hernandez thinks steel stocks (NYSEARCA:SLX) are due for a bounce.

Hernandez expects the Trump administration to continue to support the U.S. steel industry through Section 232 tariffs through at least 2020, despite investor concerns that an end to the tariffs are always only a tweet away; at worst, Trump would replace the tariffs with quotas in the event he agrees to drop them.

Seaport is bullish on the U.S. steel space overall, although Nucor (NUE -0.9%) is the top stock pick given its strong balance sheet, organic growth initiatives and potential for acquisitions; along with NUE, U.S. Steel (X +0.3%) and Steel Dynamics (STLD -2.4%) are started with Buy ratings, while AK Steel (AKS -1.3%) and Commercial Metals (CMC -1.9%) warrant only Neutral ratings.

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