The steel industry is also strengthening from measures taken by the Commerce Department to reduce the supply of cheap Chinese steel imports, which have contributed to the lingering low prices. The commerce Department imposed a 266% tariff on Chinese cold-rolled steel imports and prices have rallied roughly 21% over teh past two months reports James Passeri for TheStreet.
Jefferies is also bullish on a foreign steelmaker, Arcelormittal (NYSE: MT), which is SLX’s third-largest holding.
“Play Euro momentum via ArcelorMittal. While US prices have peaked, we see opportunity for an attractive catch-up trade in the Euro market moving into 2017 brought about by emerging protectionist trade policy and consolidation. ArcelorMittal is best leveraged to this momentum,” said Jefferies in the note posted by Barron’s.
VanEck Vectors Steel ETF