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3 Mid-Cap Steel Stocks to Buy Now After Biden Announces Infrastructure Agreement

Published 07/02/2021, 03:53 PM
Updated 07/02/2021, 04:30 PM
© Reuters.  3 Mid-Cap Steel Stocks to Buy Now After Biden Announces Infrastructure Agreement
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President Biden’s infrastructure bill to revive the country’s infrastructure sector should boost the steel industry. Furthermore, rising demand from the manufacturing and construction industries amid the current economic recovery should drive the industry’s growth in the coming months. Thus, we believe mid-cap steel companies Reliance Steel & Aluminum (RS), Ternium S.A. (TX), and Aperam S.A. (APEMY (OTC:APEMY)) should deliver solid returns in the near term. Let’s evaluate these names.On June 24, President Biden announced his support for a $1.2 trillion Bipartisan Infrastructure Framework, which, if passed into law, would be the largest long-term investment in U.S. infrastructure in nearly a century. This infrastructure plan is at the core of Biden’s “Build Back Better” agenda to rebuild the U.S. economy and eliminate prevailing structural weaknesses.

The potentially transformational investment creates room for immense opportunities and growth for the steel industry, owing to steel’s widespread use in construction. Furthermore, rising construction and manufacturing activities with the economy’s reopening should keep driving the demand for steel. The domestic raw steel production capability utilization rate hit 82.3% at the beginning of June, its highest rate since early 2020. A recent survey conducted by S&P Global Platts indicates that finished-steel prices in the United States are expected to rise throughout this month.

Considering the steel industry’s growth prospects, we think mid-cap steel stocks Reliance Steel & Aluminum Co. (RS), Ternium S.A. (TX), and Aperam S.A. (APEMY) could generate solid returns in the coming months.

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