Steel Industry Outlook: ArcelorMittal, Steel Dynamics, and Companhia Siderurgica Nacional Face Near-Term Challenges Amid Industry Headwinds.
ByAinvest
Thursday, Oct 9, 2025 10:33 am ET2min read
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The recent retreat in U.S. steel prices, which peaked at nearly $950 per short ton in March 2025, has posed a significant headwind for steel producers. The Trump administration's imposition of a 25% tariff on steel imports led to an initial surge in prices, but subsequent weakness in demand and abundant steel mill output have dragged prices down to around $800 per short ton [1]. The slowdown in the automotive sector, which is a significant market for steel producers, has also contributed to the decline in demand [1].
The Zacks Steel Producers industry, which serves a vast spectrum of end-use industries, is facing challenges from the automotive slowdown and soft demand in China. However, the industry's performance has been underwhelming compared to the broader Zacks Basic Materials sector and the S&P 500. Over the past year, the industry has gained 3.1%, compared to the S&P 500's rise of 19.4% [1]. The industry's valuation, as measured by the enterprise value-to EBITDA (EV/EBITDA) ratio, is currently trading at 12.99X, below the S&P 500's 18.68X and the sector's 14.39X [1].
Companies like ArcelorMittal, Steel Dynamics, and Companhia Siderurgica Nacional (National Steel) are worth considering despite the near-term headwinds. ArcelorMittal, a leading integrated steel and mining company, is expanding its steel-making capacity and focusing on high-added-value products [1]. Steel Dynamics, a leading steel producer and metals recycler in the United States, is seeing strong customer order activity for flat-rolled steel and is executing projects that should add to its capacity and boost profitability [1]. National Steel, one of the largest fully integrated steel producers in Brazil and Latin America, has been benefiting from its geographically diversified portfolio and acquisitions, and its focus on investment in infrastructure is expected to aid growth [1].
The structural steel industry, which is a significant segment of the steel market, is also facing challenges. The structural steel market size is expected to grow at a CAGR of 5.1% during the forecast period of 2025 to 2030 [2]. However, the industry is witnessing a slowdown in demand due to the economic slowdown and the decline in new home prices, property investment, and housing sales in China [2]. The slowdown in manufacturing activities and the construction sector in China has also led to a contraction in demand for steel [2].
In conclusion, the Zacks Steel Producers industry is navigating a challenging landscape, but the resilience of the non-residential construction market and the growth prospects of companies like ArcelorMittal, Steel Dynamics, and National Steel present opportunities for investors.
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The Zacks Steel Producers industry faces challenges due to a pullback in steel prices amid cautious buyer activity and soft demand in China. However, a resilient non-residential construction market presents opportunities. Companies like ArcelorMittal, Steel Dynamics, and Companhia Siderurgica Nacional are worth considering despite near-term headwinds.
The Zacks Steel Producers industry is grappling with headwinds as steel prices retreat amid cautious buyer activity and soft demand, particularly in China. Despite these challenges, a resilient non-residential construction market presents opportunities for growth.The recent retreat in U.S. steel prices, which peaked at nearly $950 per short ton in March 2025, has posed a significant headwind for steel producers. The Trump administration's imposition of a 25% tariff on steel imports led to an initial surge in prices, but subsequent weakness in demand and abundant steel mill output have dragged prices down to around $800 per short ton [1]. The slowdown in the automotive sector, which is a significant market for steel producers, has also contributed to the decline in demand [1].
The Zacks Steel Producers industry, which serves a vast spectrum of end-use industries, is facing challenges from the automotive slowdown and soft demand in China. However, the industry's performance has been underwhelming compared to the broader Zacks Basic Materials sector and the S&P 500. Over the past year, the industry has gained 3.1%, compared to the S&P 500's rise of 19.4% [1]. The industry's valuation, as measured by the enterprise value-to EBITDA (EV/EBITDA) ratio, is currently trading at 12.99X, below the S&P 500's 18.68X and the sector's 14.39X [1].
Companies like ArcelorMittal, Steel Dynamics, and Companhia Siderurgica Nacional (National Steel) are worth considering despite the near-term headwinds. ArcelorMittal, a leading integrated steel and mining company, is expanding its steel-making capacity and focusing on high-added-value products [1]. Steel Dynamics, a leading steel producer and metals recycler in the United States, is seeing strong customer order activity for flat-rolled steel and is executing projects that should add to its capacity and boost profitability [1]. National Steel, one of the largest fully integrated steel producers in Brazil and Latin America, has been benefiting from its geographically diversified portfolio and acquisitions, and its focus on investment in infrastructure is expected to aid growth [1].
The structural steel industry, which is a significant segment of the steel market, is also facing challenges. The structural steel market size is expected to grow at a CAGR of 5.1% during the forecast period of 2025 to 2030 [2]. However, the industry is witnessing a slowdown in demand due to the economic slowdown and the decline in new home prices, property investment, and housing sales in China [2]. The slowdown in manufacturing activities and the construction sector in China has also led to a contraction in demand for steel [2].
In conclusion, the Zacks Steel Producers industry is navigating a challenging landscape, but the resilience of the non-residential construction market and the growth prospects of companies like ArcelorMittal, Steel Dynamics, and National Steel present opportunities for investors.
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