Shares of U.S. steelmakers made an spectacular run this year, making the steel industry one of the hottest investing opportunities. Stock investors poured money into steel stocks as domestic prices rose.
However, since August, we’ve seen some downward pressure on flat-rolled steel prices with hot-rolled-coil falling near $70 ton from it’s peak in June.
That caused shares of companies like U.S. Steel and AK Steel to fall more than 40% in just a matter of weeks. Notice how the price trends of shares of both companies are almost identical.
While steel prices continue to weaken, so will the stock prices of U.S. steelmakers. Investors looking to buy shares of steel companies might want to wait until steel prices make a comeback, if they do, that is.