(C) Reuters. 2 Small-Cap Steel Stocks to Buy now
Pent-up demand from industry and supply constraints have driven an increase in steel prices beginning last summer, after they fell to record lows at the start of the pandemic. With the United States’ focus on improving infrastructure, electric vehicles and domestic production generally, small-cap companies operating in the U.S. steel industry, such as Mechel PAO (MTL) and Olympic Steel (ZEUS), are well-positioned to benefit in the coming months. Let’s evaluate these names.After experiencing a price plunge at the beginning of the COVID-19 pandemic due to an economic slowdown, U.S. steel prices have been rising consistently since last summer. Pent-up demand from steel-consuming industries with the reopening of the economy, and supply constraints, have been driving the price increases.
President Biden’s $2 trillion-plus infrastructure package proposal that focuses on reshaping American infrastructure and on the electrification of vehicles is expected to benefit the steel industry significantly over the next few years. Furthermore, the global Structural Steel market is expected to grow at a CAGR of 5.1% over the next five years to reach $779.60 billion by 2025.
Investors’ interest in the industry is clearly evident in The VanEck Vectors Steel ETF’s (SLX) 156.9% returns over the past year versus the S&P 500’s 46.5% gains over this period.
2 Small-Cap Steel Stocks to Buy now
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