Trump's Metal Tariffs Set Stage For US Steel ETF Gains
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 12 2025
0mins
Source: Benzinga
Impact of Tariffs on U.S. Steel Industry: The Trump administration's 25% tariffs on steel and aluminum imports are expected to boost domestic steel producers' market share and profitability, with projections indicating a significant reduction in finished steel imports by 2025.
Investment Opportunities in ETFs: Analysts suggest that ETFs focused on U.S. steelmakers, such as VanEck Steel ETF, SPDR S&P Metals & Mining ETF, and Global X U.S. Infrastructure Development ETF, will benefit from increased demand for domestic steel driven by the tariffs and rising prices.
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Analyst Views on STLD
Wall Street analysts forecast STLD stock price to rise
7 Analyst Rating
5 Buy
2 Hold
0 Sell
Moderate Buy
Current: 169.700
Low
185.00
Averages
190.71
High
195.00
Current: 169.700
Low
185.00
Averages
190.71
High
195.00
About STLD
Steel Dynamics, Inc. is an industrial metals solutions company. Its Steel Operations segment consists of its EAF steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting and automated rolling mills, and numerous steel coating, processing lines and warehouse operations. Its Metals Recycling Operations segment includes its OmniSource ferrous and nonferrous processing, transportation, marketing, brokerage, and scrap management services primarily throughout the United States and in Central and Northern Mexico. Its Steel Fabrication Operations segment includes its New Millennium Building Systems’ joist and deck plants located throughout the United States, and in Northern Mexico. Its Aluminum Operations segment includes the recycled aluminum flat rolled products mill being constructed in Columbus, Mississippi, and two satellite recycled aluminum slab centers in the southwest United States and Central Mexico.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Steel Operations: The company noted that profitability from steel and metals recycling is expected to exceed sequential fourth-quarter results, suggesting a rebound in market demand and enhanced production efficiency, which could lead to increased market share and competitive advantage.
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- Aluminum Operations Progress: The successful commissioning of the Columbus, Mississippi aluminum flat rolled products mill has led to the production of qualified products for the industrial and beverage can sectors, showcasing ongoing expansion and diversification of the company's aluminum business, enhancing market competitiveness.
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- Portfolio Rebalancing: Amid recent market volatility, Inside Edge Capital executed three portfolio adjustments, reallocating 2% to the short-term Treasury ETF (BIL) and 5% to the inverse Nasdaq ETF (PSQ) to mitigate potential downside risks.
- Gold Holdings Reduction: Despite heightened tensions in the Middle East typically driving gold demand, Inside Edge Capital has cut its positions in Anglogold Ashanti PLC and Agnico Eagle Mines Ltd within its Strategic Income & Growth portfolio, reflecting a cautious outlook on gold due to rising real interest rates and a strengthening dollar.
- Emerging Markets Exposure Cut: In response to increasing global risk aversion, Inside Edge Capital has reduced its investments in emerging markets, notably cutting its position in Kinross Gold Corp within its more aggressive Tactical Alpha Growth portfolio, indicating diminished confidence in these markets.
- Market Liquidity Shifts: As U.S. interest rates rise and the dollar strengthens, demand for liquidity in emerging markets has decreased, leading to a flow of funds back to the U.S., with Inside Edge Capital suggesting a potential reassessment of investments related to artificial intelligence in the future.
See More
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- Long-Term Investment: Toyota announced a $1 billion investment across two U.S. plants as part of a broader plan to invest up to $10 billion domestically over the next five years, reflecting its long-term commitment to the U.S. market.
- Capacity Enhancement: Of this, $800 million will be allocated to the Georgetown, Kentucky plant to boost production capacity for the Camry sedan and RAV4 crossover, which is expected to significantly increase market supply for these models.
- SUV Production Expansion: The remaining $200 million will be directed towards the Princeton, Indiana plant to enhance production capacity for the Toyota Grand Highlander SUV, further addressing the growing demand for larger SUVs in the market.
- Navigating Tariff Challenges: Amidst tariff and trade agreement changes during the Trump administration, which are projected to cost Toyota 1.4 trillion yen this fiscal year, this investment aims to strengthen its production capabilities in the U.S. to mitigate costs.
See More
Steel Dynamics Projects Q1 2026 Earnings Between $2.73 and $2.77
- Earnings Forecast Increase: Steel Dynamics anticipates Q1 2026 earnings per share between $2.73 and $2.77, a significant rise from $1.82 in the previous quarter and $1.44 a year ago, indicating improved profitability in steel and metals recycling operations.
- Strong Steel Operations: The company noted that profitability from steel and metals recycling is expected to exceed sequential fourth-quarter results, suggesting a rebound in market demand and enhanced production efficiency, which could lead to increased market share and competitive advantage.
- Stable Steel Fabrication: While earnings from steel fabrication are projected to remain steady compared to the previous quarter, this stability helps the company maintain financial health in a volatile market environment, ensuring ongoing investment and growth.
- Stock Price Movement: In pre-market trading on Tuesday, STLD shares were priced at $171.00, down $3.28 or 1.88%, reflecting a cautious market reaction to the earnings forecast, which may impact investor confidence.
See More
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- Earnings Guidance Analysis: Steel Dynamics projects Q1 2026 earnings per share between $2.73 and $2.77, which, while above Q4 2025's $1.82 and last year's $1.44, falls short of the $3.24 analyst consensus, indicating market concerns about profitability.
- Steel Operations Growth: The company anticipates Q1 profitability from steel operations to be meaningfully higher than Q4 2025, driven by increased shipments and metal margin expansion, as average realized selling prices outpace rising scrap raw material costs, reflecting strong demand across several key end markets.
- Metals Recycling Outlook: Despite lower shipments due to winter weather conditions slowing scrap flows, Q1 earnings from metals recycling are expected to rise quarter-over-quarter, primarily driven by significantly higher average selling values for ferrous and nonferrous metals, showcasing enhanced profitability in this segment.
- Steady Steel Fabrication: Steel fabrication operations are expected to remain steady compared to the prior quarter, as increased shipments offset metal margin compression from rising steel raw material input costs, indicating stability in the manufacturing segment.
See More
Steel Dynamics Provides Q1 2026 Earnings Guidance
- Earnings Guidance Increase: Steel Dynamics anticipates Q1 2026 earnings per diluted share between $2.73 and $2.77, significantly up from $1.82 in Q4 2025 and $1.44 in the same quarter last year, indicating a substantial improvement in profitability from steel operations.
- Strong Demand: The company expects significantly higher profitability in its steel operations for Q1 2026 compared to Q4, driven by increased shipments and metal margin expansion, with robust demand across non-residential construction, energy, automotive, and industrial sectors.
- Aluminum Operations Progress: The successful commissioning of the Columbus, Mississippi aluminum flat rolled products mill has led to the production of qualified products for the industrial and beverage can sectors, showcasing ongoing expansion and diversification of the company's aluminum business, enhancing market competitiveness.
- Share Repurchase Plan Adjustment: The company has repurchased approximately $66 million of its common stock in Q1 2026, temporarily slowing the repurchase cadence due to significant working capital needs related to annual profit-sharing payments and rapid growth in aluminum operations, with plans to resume normal repurchase activity in Q2 2026.
See More
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Report Overview: Recent reports from investment and research firms provide insights into analysts' perspectives on various companies.
Disclaimer: The views expressed in these reports do not reflect the opinions or recommendations of Barron’s.
Investment Services: Some report issuers may have existing or potential investment-banking relationships with the companies analyzed.
Purpose of Reports: The reports serve as a sampling of market analysis rather than definitive investment advice.
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