3 Iron / Steel stocks under $ 5 rated “Buy” by StockNews POWR ratings
© Reuters. 3 iron / steel stocks under $ 5 rated “Buy” according to POWR ratings
Metal prices have recovered sharply from their pandemic lows, supported by government stimulus and rebounding demand. Iron and steel prices are currently at all-time highs. Also, given that President Biden plans to strike an infrastructure deal by the end of the month, steel companies should benefit from the potential spending it includes. Against this background, we believe it might make sense to purchase low-priced iron / steel stocks of Usiminas (OTC :), Champion Iron (CIAFF) and Mechel PAO (MTL), which are rated “ Strong buy ”or“ Buy ”. in our POWR rating system. Last year, the COVID-19 pandemic negatively affected the metals market, causing metal prices to drop sharply as demand faded. The sector has also been hampered by supply chain disruptions due to mine closures and spending cuts. However, the industry rebound has so far been better than expected, with iron ore prices hitting all-time highs, mainly on the back of government stimulus measures.
Steel prices are currently at all-time highs, with China cutting production and increasing demand as construction activity resumes. American Iron and Steel Institute CEO Kevin Dempsey expects an additional 5 million tonnes of steel demand for every $ 100 billion of investment in new infrastructure. In addition, the outlook for steel is promising, with the global steel market expected to grow at a CAGR of 4.1% to reach 2.2 billion tonnes by 2026.
Therefore, we believe that steel stocks, Usinas Siderurgicas de Minas Gerais SA (Usiminas) (USNZY), Champion Iron Limited (CIAFF) and Mechel PAO (MTL), which are currently trading below $ 5, should be solid buys now, given their fundamental strength. These shares are rated “Buy” in our proprietary POWR rating system.
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