Zacks Industry Outlook Highlights ArcelorMittal, Steel Dynamics and Companhia Siderurgica Nacional

For Immediate ReleaseChicago, IL – October 9, 2025 – Today, Zacks Equity Research discusses ArcelorMittal S.A. MT, Steel Dynamics, Inc. STLD and Companhia Siderurgica Nacional SID.Industry: SteelLink: https://www.zacks.com/commentary/2764212/3-steel-producer-stocks-to-watch-amid-industry-challengesThe Zacks Steel Producers industry faces headwinds from a pullback in steel prices amid cautious buyer activity. Soft demand in China, amid economic weakness and a slowdown in the automotive sector, is another concern.However, a resilient non-residential construction market augurs well for the industry. Players from the space, like ArcelorMittal S.A., Steel Dynamics, Inc. and Companhia Siderurgica Nacional, are worth a look despite near-term headwinds.About the IndustryThe Zacks Steel Producers industry serves a vast spectrum of end-use industries, such as automotive, construction, appliance, container, packaging, industrial machinery, mining equipment, transportation, and oil and gas, with various steel products. These products include hot-rolled and cold-rolled coils and sheets, hot-dipped and galvanized coils and sheets, reinforcing bars, billets and blooms, wire rods, strip mill plates, standard and line pipe, and mechanical tubing products.Steel is primarily produced using two methods — Blast Furnace and Electric Arc Furnace. It is regarded as the backbone of the manufacturing industry. The automotive and construction markets have historically been the largest consumers of steel. Notably, the housing and construction sector is the biggest consumer of steel, accounting for roughly half of the world's total consumption.What's Shaping the Future of the Steel Producers' Industry?Softening Steel Prices Pose Headwinds: The recent retreat in U.S. steel prices is a concern. The Trump administration's imposition of a 25% tariff on all steel imports into the United States in March 2025 led to a surge in benchmark hot-rolled coil (HRC) prices to a peak of nearly $950 per short ton. While the administration's early June doubling of steel tariffs to 50% and the consequent steel mill price hikes triggered only a temporary lift, it failed to effectively drive up HRC prices further to new highs as intended.Overall demand weakness and abundant steel mill output have put a pause on a sustained price rally, dragging HRC prices to around $800 per short ton. The price retreat poses a headwind for U.S. steel producers, and a meaningful recovery is unlikely over the near term, given a well-supplied market and the persistent weakness in U.S. manufacturing. Weak consumer activities and excessive inventories have also exerted pressure on steel prices in China and Europe.Automotive Slowdown a Drag: Automotive is a significant market for steel producers. A slowdown in global automotive production curtailed steel consumption in this key end market in 2024. Demand from this key sector slowed significantly in the second half of 2024. North American automotive build rates declined considerably during the second half. High interest rates, along with concerns over economic slowdown and tariffs, are likely to put pressure on the automotive market in 2025.Auto and auto part tariffs may also affect automotive production in North America. This may impact steel shipment volumes to this key market. Nevertheless, order activities in the non-residential construction market remain strong, underscoring the inherent strength of this industry. Infrastructure projects in the United States are on the rise, driven by government initiatives to upgrade transportation and utility networks.Sluggishness in China a Concern: Steel demand in China, the world's top consumer of the commodity, has softened due to a slowdown in the country's economy following a protracted property crisis and weak global demand. The real estate sector has taken a hard hit amid a decline in new home prices, property investment and housing sales. Notably, real estate accounts for roughly 40% of China's steel consumption.A slowdown in manufacturing activities has led to a contraction in demand for steel in China. The manufacturing sector has taken a beating due to weaker external demand for manufactured goods and a slowdown in infrastructure spending. China has also seen a slowdown in the construction sector. The sluggishness in these key steel-consuming sectors is expected to hurt demand for steel over the short term.Zacks Industry Rank Indicates Bleak ProspectsThe Zacks Steel Producers industry is part of the broader Zacks Basic Materials Sector. It carries a Zacks Industry Rank #198, which places it in the bottom 19% of more than 250 Zacks industries.The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates a gloomy near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.Before we present a few stocks that you may want to consider for your portfolio, let's take a look at the industry's recent stock-market performance and valuation picture.Industry Underperforms Sector and S&P 500The Zacks Steel Producers industry has underperformed both the Zacks S&P 500 composite and the broader Zacks Basic Materials sector over the past year.The industry has gained 3.1% over this period compared with the S&P 500's rise of 19.4% and the broader sector's increase of 9.8%.Industry's Current ValuationOn the basis of the trailing 12-month enterprise value-to EBITDA (EV/EBITDA) ratio, which is a commonly used multiple for valuing steel stocks, the industry is currently trading at 12.99X, below the S&P 500's 18.68X and the sector's 14.39X.Over the past five years, the industry has traded as high as 13.05X, as low as 2.77X and at the median of 8.98X.3 Steel Producer Stocks in FocusArcelorMittal: Luxembourg-based ArcelorMittal is among the leading integrated steel and mining companies globally. MT is expanding its steel-making capacity and focusing on shifting to high-added-value products. Its strategic expansion projects are expected to boost profitability and cash flows. MT is optimizing its decarbonization strategy to maintain competitiveness and profitability. The company is committed to returning shareholders' value while maintaining a strong balance sheet. Its cost-improvement efforts are also expected to support margins.ArcelorMittal currently carries a Zacks Rank #3 (Hold). The company beat the consensus estimate for earnings in three of the trailing four quarters. In this time frame, it has delivered an average earnings surprise of roughly 20.3%. MT has an expected earnings growth of 63.4% for the current year. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Steel Dynamics: Based in Indiana, Steel Dynamics is a leading steel producer and metals recycler in the United States. Steel Dynamics' customer-focused approach, along with market diversification and low-cost operating platforms, positions it for future growth opportunities. The company should also gain from its investments in beefing up capacity and upgrading facilities.STLD is seeing strong customer order activity for flat-rolled steel. It is currently executing several projects that should add to its capacity and boost profitability. STLD is ramping up operations at its new state-of-the-art electric arc furnace flat-rolled steel mill in Sinton, TX. The value-added flat-rolled steel coating lines, consisting of two paint lines and two galvanizing lines, also enhance the annual value-added flat-rolled steel capacity. The company is ramping up volumes from these lines, which are expected to provide earnings benefits in 2025.Steel Dynamics carries a Zacks Rank #3. The company outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an average earnings surprise of roughly 2.5%. STLD has an expected long-term earnings growth of 13.8%.Companhia Siderurgica Nacional (National Steel): Brazil-based National Steel is one of the largest fully integrated steel producers in Brazil and Latin America, in terms of crude steel production. SID has been benefiting from its geographically diversified portfolio and acquisitions. Geographical diversification and a solid product portfolio, which includes hot- and cold-rolled flat steel, galvanized sheets and tin plates for the packaging, automotive and construction industries, provide it with a competitive edge.The company also gains from strong demand in its cement business in residential and civil construction projects, which is expected to boost its sales and production. Its focus on investment in infrastructure will also aid growth.National Steel, currently carrying a Zacks Rank #3, has an expected earnings growth rate of 127.8% for the current year. SID has an expected long-term earnings growth of 37.7%.Free: Instant Access to Zacks' Market-Crushing StrategiesSince 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. 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All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance  for information about the performance numbers displayed in this press release.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report National Steel Company (SID): Free Stock Analysis Report Steel Dynamics, Inc. (STLD): Free Stock Analysis Report ArcelorMittal (MT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks