The firm issued Buy ratings on the following steel stocks:
- U.S. Steel (NYSE:X)
- Steel Dynamics (NASDAQ:STLD)
And issued Neutral ratings on these:
- AK Steel (NYSE:AKS)
- Nucor (NYSE:NUE)
- Commercial Metals (NYSE:CMC)
Citigroup estimates that prices for hot-rolled steel coil will stay in the $550 to $600 per ton range well into 2017, which marks a more bullish view than the Wall Street consensus. In contrast, many other metals analysts are looking for steel prices to plunge over the next several months, due to relatively high price premiums vs. imports.
Citi cited strong idlings, imports and inventory for its continued bullishness.
The SLX was unchanged at $31.16 per share in premarket trading Tuesday. The largest ETF that invests in steel-focused companies has surged nearly 60% year-to-date, versus a more modest 7% rise in the benchmark S&P 500 index in the same period.