Steel Stocks: 1 Steel Stock to Buy and 1 to Sell on Trump Tariffs

Tariffs and Market Impact - The Trump administration's proposed import tariffs have stoked inflation fears, impacting stocks through stockpiling and rising costs, leading to softened demand and compressed margins [1] - The basic materials sector anticipates a potential surge in steel prices due to a proposed 60% tariff on U.S. imports of Chinese-origin steel [1] US Steel and Nippon Steel Deal - Nippon Steel won the bidding war for United States Steel Co with a $14.9 billion offer, a 40% premium over its December 15, 2023 closing price [2] - The deal was blocked by President Biden on January 3, 2025 citing national security concerns, despite unanimous shareholder approval in April 2024 [3] - US Steel needs the deal to modernize its aging infrastructure and shift from costly blast furnace technology to more efficient electric arc furnaces [6] Steel Dynamics Overview - Steel Dynamics has a solid balance sheet with low debt, positioning it well to weather macroeconomic challenges [7] - The company guided down its Q4 2024 EPS guidance to $1.26-$1.30 due to lower pricing, seasonal shipment declines, and an unplanned outage [9] - Positive business outlook for 2025 is supported by declining interest rates, U.S. infrastructure programs, and onshoring trends [10] Market and Analyst Sentiment - Steel Dynamics has a "Hold" rating among analysts, with top-rated analysts identifying five other stocks as better buys [12] - The company has repurchased $250 million of stock and anticipates improved volumes in the second half of 2025 [10]