Steel producers, construction firms surge as Senate passes infrastructure bill

Aug. 10, 2021 12:36 PM ETNucor Corporation (NUE), X, AA, FCXCAT, BAX, CMC, EXP, KBR, FLR, DE, STLD, URI, HEES, CLF, MLM, VMC, ACM, SUMBy: Carl Surran, SA News Editor76 Comments

Construction of New Bay Bridge
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  • Steel stocks are rallying to records and multiyear highs as the $1T infrastructure bill passes the U.S. Senate and hot-rolled coil futures rose to $1,885/ton, near its all-time high, according to Bloomberg.
  • Steel producer Nucor (NUE +8.1%) hits a record high and races to the top of the S&P 500 leaderboard, while U.S. Steel (X +5.6%), Cleveland-Cliffs (CLF +4.8%), Commercial Metals (CMC +3.8%) and Steel Dynamics (STLD +5.2%) all rally.
  • Ctigroup analysts expect the infrastructure plan will lift steel demand by 3M-4M metric tons annually, with two-thirds for long steel products used in construction, Bloomberg reports.
  • Other industrial metal stocks including Alcoa (AA +7.4%) and Freeport-McMoRan (FCX +4.6%) also are up sharply.
  • Building and construction material stocks such as Vulcan Materials (VMC +2.2%), Martin Marietta Materials (MLM +2.3%), Summit Materials (SUM +5.1%) and Eagle Materials (EXP +2.2%) trade broadly higher.
  • Also higher are construction companies and equipment makers, including Caterpillar (CAT +2.2%), Deere (DE +1.8%) Fluor (FLR +3.8%), KBR (KBR +0.7%), United Rentals (URI +2.6%) and H&E Equipment Services (HEES +3.2%).
  • Now comes the hard part: The bill goes to the House, which is scheduled to be on break until Sept. 20, and Speaker Nancy Pelosi has said she will not allow a vote until the Senate has passed a $3.5T package of social spending and tax increases.

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