Steel is the second most traded commodity in the world after oil and was a on a monster roll throughout the first half of the year. Prices reached $1100 per metric ton and are now at a lower range. I can see why some people are still bullish on steel but I think these are the 3 core reasons

Why Steel will continue to be bullish
1. Global steel demand is increasing as the U.S. accounts for just 40% of the world’s demand. Developed nations need steel for mills, refineries and other commodity mining and extraction structures

2. The high price of gas will drive up import steel prices which in turn will push up domestic steel prices for more revenue. Also, the high price of oil will shift the countries into creating more non-oil consuming infrastructure such as subways and railroads that require more steel.

3. Steel companies are better positioning themselves by way of acquisition to ensure that raw materials are better supplied.

Yet iron ore prices have increased 71%, meaning costs for steel companies are getting high. So while the companies may pull in more revenue, the bottom line may not be improving as fast. This high price may cause consumers to find substitute goods and reduce demand.

What do you guys think about steel? Some steel companies worth a look are AK Steel (AKS), US Steel (X), Nucor Corp. (NUE), Arcelor Mittal (MT), Posco (PKX), Companhia Siderurgica Nacional (SID), Mechel (MTL)