Zacks Industry Outlook Highlights Nucor, ArcelorMittal and Steel Dynamics

For Immediate ReleaseChicago, IL – July 15, 2025 – Today, Zacks Equity Research discusses Nucor Corp. NUE, ArcelorMittal S.A. MT and Steel Dynamics, Inc. STLD.Industry: SteelLink: https://www.zacks.com/commentary/2579161/3-steel-producer-stocks-to-watch-amid-industry-headwindsThe Zacks Steel Producers industry faces headwinds from a pullback in steel prices amid cautious buyer activities. Soft demand in China amid economic weakness and the slowdown in the automotive sector are other concerns.However, a resilient non-residential construction market augurs well for the industry. Players from the space, like Nucor Corp., ArcelorMittal S.A. and Steel Dynamics, Inc. 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?Weakening Steel Prices Pose Headwinds: U.S. steel prices saw a sharp decline in 2024 due to a slowdown in end-market demand and oversupply of steel after a strong run in late 2023 that extended into early last year. Benchmark hot-rolled coil (HRC) prices tumbled more than 40% last year to close near the $700 per short ton level from $1,200 per short ton at the beginning of 2024.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 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, as steel buyers remained cautious.Overall demand weakness and abundant steel mill output have put a pause on a sustained price rally, dragging HRC prices below the $900 per short ton level. The price retreat poses headwind for steel producers, and a meaningful recovery is unlikely over the near term given a well-supplied market, ample inventories 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 are also likely to 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 Downbeat ProspectsThe Zacks Steel Producers industry is part of the broader Zacks Basic Materials Sector. It carries a Zacks Industry Rank #179, which places it in the bottom 27% 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 bleak 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 lost 25.2% over this period compared with the S&P 500's rise of 10.9% and the broader sector's decline of 1.4%.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 11.16X, below the S&P 500's 22.62X and the sector's 15.78X.Over the past five years, the industry has traded as high as 14.89X, as low as 3.52X and at the median of 8.81X.3 Steel Producer Stocks in FocusNucor: Charlotte, NC-based Nucor makes steel and steel products with operating facilities in the United States, Canada and Mexico. Nucor is expected to gain from the strength in the non-residential construction market. The company also remains focused on achieving greater penetration in the automotive market.Nucor should also benefit from considerable market opportunities from its strategic investments in its most significant growth projects. NUE remains committed to boosting production capacity, which should drive growth and strengthen its position as a low-cost producer. Nucor is maximizing its returns to shareholders by leveraging its strong balance sheet and cash flows.Nucor carries a Zacks Rank #3 (Hold). Its earnings beat the Zacks Consensus Estimate in each of the last four quarters. NUE has a trailing four-quarter earnings surprise of roughly 31.6%, on average. The Zacks Consensus Estimate for NUE's 2025 earnings has moved up 4.9% in the past 60 days. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.ArcelorMittal: 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. 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 9.6%. MT has an expected earnings growth of 56.6% for 2025.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 each of the trailing four quarters with an average earnings surprise of roughly 3.4%. STLD has an expected long-term earnings growth of 13.3%.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpJoin us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. 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.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them 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 Steel Dynamics, Inc. (STLD): Free Stock Analysis Report ArcelorMittal (MT): Free Stock Analysis Report Nucor Corporation (NUE): 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