One firm foundation the world’s economy has is strongly built on steel. It is estimated that 1.9 billion tons of steel worldwide are used yearly for infrastructures such as buildings and bridges and heavy machinery and automobiles, among other uses. In some limited situations, steel is replaced by specialty metals. However, steel continues to have an insatiable long-term demand.
As Canada focuses on a green economy, an increase in the demand for Canadian steel is more likely to happen soon. Reports from Global Efficiency Intelligence, an environmental research firm, stated that Canada is currently a frontrunner in producing low-carbon (BF) and basic oxygen furnaces (BOF) in 2020.
Great anticipation for the improvement of current market conditions will likely come from the steel industry. One key contributor is China’s recovery that revived demands for rising prices and vital end-user industries. The construction sectors and automotive industry are essential end-users that rally the boost in demand for products from flat steel. Also, the expansion of the construction sector will cause a demand increase for key markets involving long and flat steel products.
Best Steel Stocks in Canada
With everything said, a few steel companies have put themselves ahead of their competition. They possess more modern production capabilities and cost controls that help them excel amongst the global competition. Here are some of them:
First Quantum Minerals | Toronto, CA
Market Capitalization: CA$ 18.2B
P/E Ratio: 47.10
Dividend Yield: 0.037%
First Quantum Minerals Inc., as an explorer and producer of base metal, has experienced a rise in stock prices by 0.377%, with a C$ 29.32 close. However, last May 10, 2021, this level indicated a fall in stocks by over 16% from a one-year high price of C$ 35.07 since then.
But diversification of this Toronto-based metal company stocks saw an increase of more than 106% based on year-over-year (YoY), indicating a year-to-date (YTD) growth of over 28%. In addition, it jumped high by about 25% in the past nine (9) months and expanded roughly 30% in 30 days.
Labrador Iron Ore Royalty Corp | Toronto, CA
Market Capitalization: CA$ 2.21B
P/E Ratio: 5.89
Dividend Yield: 24.27%
Toronto-based Labrador Iron Ore Royalty Corporation is a steel company that generates most, if not all, of its revenue from equity investments in Iron Ore Company of Canada (IOC) and its IOC royalty and commission interests. IOC operates as a significant iron mine near Labrador City, Newfoundland, and Labrador, utilizing lands leased from LIORC. LIORC directly owns an IOC equity interest. Through its wholly-owned subsidiary, Hollinger-Hanna, both receive grosses overriding royalties from its iron ore products produced from numerous leased lands sold and shipped by IOC and commissioned through IOC’s iron ore sales. IOC is one of the leading Canadian producers that serve worldwide in iron ore pellets and concentrate products.
Neo Performance Materials Inc. | Toronto, CA
Market Capitalization: CA$ 721.46M
P/E Ratio: 25.20
Dividend Yield: 2.10%
Neo Performance Materials Inc. is a mining firm integrated into the focus of rare earth elements, the REEs. It noted the rise of its stocks to 9.949% per C$ 21.77 share, seen at the October 22 market close. This session marked the scrips hitting an all-time high price of C$ 21.89. As the metal stock saw an increase of almost 80% in the last year, it also had a gain of about 58% based on YTD statistics. In addition, it surged by about 28% over the previous three (3) months, jumping to an approximate 23% in the past 30 days.
Russel Metals, Inc. | Mississauga, CA
Market Capitalization: CA$ 2.21B
P/E Ratio: 6.86
Dividend Yield: 4.32%
A Canada-based metal distribution company, Russel Metals, conduct their business primarily through three (3) different metals distribution segments: (1) metals service centers, (2) energy products, and (3) steel distributors. The first segment, metal service centers, focuses on providing services in processing and distribution to broad base end-users. The second segment of the energy products segment deals with the distribution of oil country tubular goods, line pipe, tubes, valves, and fittings, mainly in Western Canada and the US, focused on the energy industry. And lastly, the steel distributors segment functions as master distributors in selling steel via large volumes to other counterpart steel service centers and equipment manufacturers on an “as is” basis of focus. This steel company generates all of its revenue from the North American market.
Stelco Holdings, Inc. | Hamilton, CA
Market Capitalization: CA$ 3.19B
P/E Ratio: 10.56
Dividend Yield: 1.94%
Stelco Holdings Inc is a Canadian steel company that produces and sells steel products for valued customers in the steel service center, appliance, automotive, energy, construction, pipe, and tube segments in North American industries. This company’s product offerings are as follows: (1) Stelco Hot Roll Products, (2) Hot Roll Automotive, (3) Stelmax 80, (4) Stelmax 90, and (5) Stelmax 100.
Stelco Holdings is a known producer of rolled and value-added steel used in the construction, automotive, and energy industries in and out of Canada. This stell company has 2.8 million tons of production capacity in terms of steel annually, making it the largest Canadian steel company among its counterparts.
Tree Island Steel, Ltd. | Richmond, CA
Market Capitalization: CA$ 142.73M
P/E Ratio: 8.09
Dividend Yield: 2.39%
Based in Richmond, Tree Island Steel focuses on steel wire and other wire products. This Canadian steel company utilizes rods of zinc-carbon steel in manufacturing eight product categories mainly used in industrial, residential, commercial, and agricultural markets.
Tree Island Steel Ltd’s steel business operations primarily offer bulk nails, stucco reinforcing products, concrete reinforcing mesh, fencing, and other fabricated wire products. Geographically, they have a business presence across Canada and the United States, including other US regions, which accounts for the majority share of the revenue.
Bottom Line: Final Steel Thoughts
The evident rise that is reflecting the potentials the base metal sector offers at the moment could be one great option as you explore and expand your portfolio for higher returns in the long run. However, investors like yourself should always bear in mind that demands and supply factors of the respective commodities do come and go, either in a snap or for long periods. So, before venturing into commodity stocks, in addition to their investment preferences and risk capacity, it is always best to do some research like what you did today with this fine read. Good luck in making that investment decision as you chose the best Canadian steel stocks for you today!
Steel Stocks Canada
As the country focuses on a green economy, demand for Canadian steel is likely to increase in the future. According to a report by environmental research firm Global Efficiency Intelligence for 2020, Canada is at the forefront of low-carbon (BF) and basic oxygen furnaces (BOF) production.
The steel industry is anticipated to benefit from improved market conditions – helped by the recovery in China, a revival in demand from key end-user industries and rising prices. A rally in key end-user sectors such as construction and the automotive sector will boost demand for flat steel products. In addition, an upturn in the construction sector will increase demand for long and flat steel products in key markets.
Canadian steel and aluminum stocks on today’s list have not experienced significant changes in their share price after trading the TSX V: V by about 3% in the last week. We have selected five steel stocks with Zacks 1 (Strong Buy) or 2 (Buy and Hold) that have prospects to perform well in 2021, taking advantage of improved market fundamentals. After the decision in the USA, steel stocks reacted suddenly on the market.
Tree Island Steel is a Canadian-based steel company focused on steel wire and other wire products. The company uses zinc carbon steel rods to manufacture eight product categories used in the industrial, residential, commercial and agricultural markets. In addition, Stelco Holdings produces rolled and value-added steel used in the construction, automotive and energy industries.
The company has a production capacity of 2.8 million tonnes of steel per year, making it the largest steel company in Canada. Algoma Steel Inc. of Marie, Ontario, employs 2,600 Canadians and is Canada’s only vertically integrated steel plate manufacturer. It is a leading manufacturer of cold and hot rolled steel sheets and strips. In addition, the Ontario-based company manufactures and distributes steel products throughout North America.
The steel industry is making a comeback, buoyed by a pick-up in demand and a rise in steel prices. Improving industrial market conditions and a recovery in demand should support volumes at Ohio-based Olympic Steels. In addition, due to supply constraints and higher raw material costs, steel prices are on the upswing, supported by rising demand.
The pandemic brought the American steel industry to its knees last spring and forced manufacturers to stop production as they struggled to survive in an imploding economy. A decline in demand in key end-use sectors has burdened the steel industry for much of the first half of the year. The timber and steel industries were as surprised as the automotive industry by the rapid recovery in demand that began last summer.
US steel stocks rebounded as companies saw shares of US Steel Corp. tumble more than 8% in an extended session on Thursday after the company changed from quarterly loss and reported that its steel production in Canada rose from 985 thousand tons in December 2019 to 1,090 thousand tons in January.
The steel industry is a part of the basic material sector, consisting of steel production, mining and related activities. The steel sector consists of companies that use iron ore and scrap to produce steel and steel products. The steel industry employed approximately 25,000 workers and contributed $3.8 billion to the Canadian gross domestic product in 2019.
The last boom boosted steel demand and kept prices high. As a result, steel stocks remain attractive to investors, and the industry is making money at the moment. Phil Gibbs, head of metal equity research at KeyBanc Capital Markets, says he is confident that steel prices are in a bubble and that steel stocks are in a bubble themselves.
Steel is a highly cyclical industry whose performance tends to rise with economic activity and fall. The US Steel is the only blast furnace company with a long enough history to investigate how earnings can be volatile (NUCOR Steel Dynamics, as the chart shows below).
The price of hot-rolled steel coils is soaring due to booming demand. Cleveland Cliffs “current business is to create a company supplier to the steel industry that produces iron ore and buys steel. Last year, US Steel was acquired, which consisted of the assets of the global steel company ArcelorMittal. By purchasing and establishing this new company, it is helping Cleveland Cliff to have customers for its iron ore. In addition, Cleveland Cliff is a major supplier of other steel companies, including Nucor, so that the acquisition of its customers will help ensure continued aggregate demand.
We are proud to support companies like Algoma Steel that are taking the opportunity to lead a low-carbon economy. In February, rating agency Moodys raised the company’s credit rating based on “improvements in operating performance and credit ratios, higher steel prices and expectations that the company will generate positive cash flow, ” Moodys said in a statement.
Steel Dynamics Inc. (STLD) Stock Quotes Nasdaq provides share prices and market activity data for US and global markets. Russell Metals is a Canadian-based metal distributor focused on steel distribution. Steel Dynamics’ stocks rose Tuesday after reporting better-than-expected quarterly profits and said it expects increasing demand for steel, automobiles and other industries this year.
Common Stock RS Stock Quotes Nasdaq is offering stock quotes to service center companies in North America, the United States and Canada to service our foreign steel tariffs effective June 19, 2019, which will drive up prices for the United States, largest net importer. In addition, tariffs on foreign steel Canada share prices service center for companies in North America, the US, and Canada will be delayed for 20 minutes.
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