Investing in Steel Stocks
In this article, we take a look at some of the best steel stocks to watch in 2024 and provide step-by-step instructions on how to invest in steel shares with Admirals!
Table of Contents
Why Invest in Steel
Steel is the backbone of the modern world, with the metal used across a wide range of industries, particularly construction. Bridges, railways, roads, automobiles and buildings, are all produced using steel.
Therefore, demand for steel tends to be cyclical. When the economy is growing, there is more construction and, consequently, demand for steel increases. The opposite is also true.
Investing in steel, then, is an investment in economic growth. In 2024, demand for steel is expected to grow in most markets, although is anticipated to drop in China, the world’s number one consumer and producer of steel.
The Best Steel Stocks to Watch
So, which steel stocks could potentially benefit from a continued increase in demand for steel in the future? In the following sections, we will take a look at three steel companies to watch in 2024.
ArcelorMittal
ArcelorMittal was formed in 2007 by the merger of European company Arcelor and India’s Mittal Steel which, at the time of the merger, were the world’s two largest steel companies.
ArcelorMittal operates around the world, offering a fair amount of geographical diversity and, consequently, possibly a good option for those looking to invest in global growth. Despite having a global footprint, the steel stock’s European segment generates the lion’s share of revenue, accounting for almost 60% of sales in 2022.
At the time of writing, the steel company has a dividend yield of 1.68%.
Nippon Steel
Nippon Steel is the largest steel producer in Japan and, in December 2023, struck a deal to acquire US Steel for almost $15 billion in cash.
Although Nippon’s shares dipped as the news broke, the company’s president, Eiji Hashimoto, said that he “doesn’t care about short-term stock moves”, stating that Nippon wants to “complete a global network for a new era in the industry”.
The acquisition would allow the steel company to significantly expand its operations in the US, which is the world’s largest market for high-grade steel and where steel demand is expected to increase. Another region where Nippon is hoping to expand is India, which is forecast to experience strong demand growth in the coming years.
At the time of writing, Nippon Steel has a dividend yield of 4.36%.
Nucor
Nucor is the largest steel producing company in the world by market capitalisation and was a pioneer in the use of electric arc furnaces, which are smaller and more cost efficient than blast furnaces, for high-volume steel production.
The steel stock has experienced impressive levels of growth in recent years. From the start of 2020 until the end of 2023, Nucor’s share price rose 210%. That’s more than tech stocks Apple, Amazon and Meta have grown over the same time period.
But, even after this remarkable growth, Nucor currently trades at a price to earnings ratio of 8.6, less than half the average of the S&P 500 at the time of writing. Furthermore, Nucor is a dividend king, a title bestowed on stocks which have increased their annual dividend for at least 50 consecutive years. At the time of writing, Nucor has a dividend yield of 1.26%.
How to Invest in Steel Stocks
With an investing account from Admirals, you can buy shares in the three steel stocks examined in this article. In order to learn how to invest in steel stocks, follow these steps:
- Register for an Invest.MT5 account.
- Log in to the Dashboard.
- Open the MetaTrader web terminal.
- Search for the steel stock you want to buy and click the symbol to open a price chart.
- Press ‘Create New Order’ enter the number of steel shares and click ‘Buy’.
Investing with Admirals
With an Invest.MT5 account, you can invest in over 4,500 stocks and more than 200 Exchange-Traded Funds (ETFs). Click the banner below to register for an account today:
FAQ
Is it good to invest in steel?
The steel industry is cyclical, with demand tending to increase when the economy is growing. Consequently, if investors feel confident about the global economy, steel may be a good investment. However, it is important to conduct your own research and evaluate whether investing in steel fits with your individual circumstances and investing goals.
How do you invest in steel?
There are a number of options for those looking to gain exposure to the steel industry. Two of the best options for a long-term investment in steel include buying shares in a company which operates in the sector or investing in a steel ETF.
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