These Metal Stocks Are Trending In The Market
The metal industry seems to be performing very well at the moment. COVID caused most steel stocks and other metal stocks in the market to tank in early 2020. But in 2021, and late 2020, it seems like the demand is now growing for steel. Manufacturing is increasing in numbers despite the pandemic environment, and this is leading to higher demand. As a result of the demand, steel prices seem to be rising. The American Iron and Steel Institute reported a 3.1% increase in steel production in the week ending on January 2nd. Capacity utilization improved to more than 80% as well. Manufacturing only seems to be growing at the moment due to the increased demand. The World Steel Association has predicted that the demand for steel will rise to 4.1% during this calendar year. This comes after its 2020 prediction of a 2.4% drop in demand.
Light vehicle production is also very important in terms to this metal. The production of light vehicles is projected to increase a lot this year. Since automotive is an important sector to steel, this could be another reason that steel stocks may go up in the market. Another analyst predicted that light vehicle production worldwide may increase 14% in 2021. If you look at most steel tickers, there is one thing you may notice in common. This thing is the amount that these steel stocks have gone up in the last year. Investors may overlook this type of company when investing in metal stocks. The problem with that, is there is plenty of steel stocks to watch in the market at the moment. Let’s now take a look at four metal stocks that are trending upwards in the market as 2021 continues through February.
Top Metal Stocks To Watch
- Alcoa Corporation (NYSE: AA)
- United States Steel Corporation (NYSE: X)
- Cleveland-Cliffs Inc. (NYSE: CLF)
- Nucor Corporation (NYSE: NUE)
The first metal stock to watch is Alcoa Corporation. Alcoa is a company that produces and sells bauxite, alumina, and aluminum products. Its products are sold in the USA, Spain, Australia, Canada, Brazil, and more. Alcoa will mine bauxite, and process the mineral into alumina. It also smelts aluminum, casts it, and rolls it. The company also has hydro and coal generation technology that produces and sells electricity via wholesale. This is purchased by traders, industrial consumers, distribution companies, and more. Let’s see how the company’s 2021 performance has been so far.
On January 20th, the company released its fourth quarter and full year financial and operational results for 2020. It was here where it realized a 15% increase in sales revenue of value add products. This was as a result of increased aluminum demand. It generated $38 million in cash from operations in the fourth quarter of 2020 as well. In its full year report, the company beat its 2020 target for cash actions, and delivered about $900 million. The president and CEO of the company, Roy Harvey said, “In a very challenging year, we set multiple production records, exceeded our goals for cash management, and made significant progress on our multi-year strategy.”
United States Steel Corporation
Next up on this list of metal stocks is United States Steel Corporation. This company produces and sells flat-rolled and tubular steel products. Its products are mostly sold in North America and Europe. Its flat rolled product section sells slabs, strip mill plates, sheets, and more. The company has a variety of other products in its lineup as well. In the last year this company has seen a significant amount of momentum. Let’s check out the latest from United States Steel Corporation this year.
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Its latest update was on February 2nd. The company announced the pricing of its upsized underwritten public offering of 42 million shares of common stock. The original number was 40 million, and has now been increased. This will result in gross proceeds of $699 million.
Now let’s talk about Cleveland-Cliffs Inc. Cleveland-Cliffs is an iron ore mining company operating in the United States and Canada primarily. Its key segments in the company are mining, pelletizing, and metallic. It operates three iron mines, the Tilden mine, Northshore mine, and United Taconite mine. Cleveland-Cliffs products are used to produce blast furnace steel, flat rolled carbon, stainless, and electrical steel products. The steel products produced are used in the automotive, infrastructure, and manufacturing markets. Let’s check out the company’s latest performance in the market.
On January 25th, the company provided a preliminary fourth quarter result outlook. Its revenue was about $2.2 to $2.3 billion, a total 320% increase year over. That’s right, you heard that correctly. Its adjusted EBITDA of $280-$290 million was a 150% increase year over year as well. This was also a 6 year high for Cleveland-Cliffs. But the President and CEO Lourenco Goncalves added this note, ”Our fourth quarter strong results are just a sample of what we should be able to accomplish in 2021, when the contributions of the recent acquisition of ArcelorMittal USA and the sales of HBI to third-party customers will be fully reflected in the numbers.” This positive outlook is potentially why CLF stock could be one to watch.
The final metal stock to watch is Nucor Corporation. This is a company that sells and manufactures steel and related products. It produces hot-rolled, cold-rolled, and galvanize sheet steel. It also sells most steel products you can think of. The company has experienced a great amount of growth in recent times. But how is it performing in February 2021?
The company released its results for the fourth quarter and year ended 2020 on January 28th. It announced nearly doubled consolidated net earnings in the quarter. The President and CEO of Nucor said, “At the onset of the pandemic, we capitalized on the flexibility of our business model and strong demand for our products to gain market share across nearly our entire portfolio.” That is the latest update from the company.
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