Tariffs Drive Steel Stock Gains As Analyst Highlights Catalysts For Nucor, US Steel

The steel industry has been abuzz with news of President Trump's recent tariff announcement, which has sparked a rally in steel stocks. JPMorgan analyst Bill Peterson sees significant implications for steel stocks beyond the political drama, highlighting key players poised to benefit from higher pricing and shifting trade flows. In this article, we will explore the impact of tariffs on the steel market and the potential long-term effects on domestic steel producers like Nucor and U.S. Steel.



On Monday, President Trump signed into action a new round of Section 232 tariffs, fueling a rally in steel stocks. While the broader market saw modest gains, steel stocks jumped 5% to 17% in anticipation of higher pricing. The HRC forward curve is already up ~10% since pre-election levels, and industry participants at the Tampa Steel Conference see a potential price range of $850-$900 per ton, with peaks near $1,000 per ton. The biggest winners in this sustained high-price environment are stocks with high spot exposure, particularly U.S. Steel and Cleveland-Cliffs Inc (CLF). However, Nucor remains Peterson's long-term favorite, given its earnings stability in both strong and weak pricing environments.



Nucor, the leading American steel production group, has seen its stock price rise nearly 2% today after President Trump firmed up plans to impose 25% tariffs on US metals imports. The company's product diversification gives it a structural advantage, helping it weather market volatility even as rate and trade policy uncertainty clouds the steel outlook. Nucor is prioritizing profitability over volume, a strategy that Peterson believes warrants a multiple expansion for both Nucor and the broader sector.

U.S. Steel Corp X also holds an Overweight rating from Peterson. The key catalyst for U.S. Steel is the stalled NSC deal, which leaves it to stand alone with strong valuation support. Easing capex requirements and a likely free cash flow inflection in 2025 could pave the way for share buybacks, while new growth projects add further upside.

Steel Dynamics Inc STLD lands a Neutral rating from Peterson. The company's aluminum rolling mill (ADI) project could create long-term value, but Peterson sees a longer runway to meaningful impact. Near-term, risks include potential pricing pressure on its Steel Fabrication segment and UBC spreads affecting ADI margins.



In conclusion, the recent Section 232 tariffs on steel and aluminum have significantly impacted the competitive landscape for domestic steel producers like Nucor and U.S. Steel. While the tariffs have led to higher steel prices, a favorable demand-supply dynamic, and strategic positioning, giving steel stocks room to run, the longer-term picture is less certain, with potential shifts in exemptions and demand-side risks looming. Despite these uncertainties, analysts maintain a bullish stance on steel stocks, suggesting they remain well-positioned. Investors should closely monitor the evolving trade policies and geopolitical tensions to capitalize on the opportunities presented by the steel industry's dynamic landscape.