The steel industries are a component of the primary materials sector, including companies engaged in steel manufacturing, mining, and associated activities. Despite being a significant United States industry, international competition has caused a substantial fall in the number of steel industries manufacturing the metal in recent years. Arizona-based Reliance Steel & Aluminum Co (RSAC), Rio Tinto PLC (based in the U.K.), and Vale SA (based in Brazil) are a few of the top steel companies in the world.

In 2021, the steel demand rose by 2.7%. The World Steel Association (WSA) predicts that this year's growth in steel demand will be substantially slower, at 0.4%.

The world steel sector has been seriously impacted by the current Russian-Ukraine war. Ukraine and Russia have always been the top exporter of steel worldwide. Over the past year, SLX, or VanEck Vectors Steel ETF, which tracks steel equities, has outperformed the overall market.

Top Steel Stocks of Q2 2022

Here are the four best steel stocks of Q2 2022 with the highest growth, the best value, and high momentum.

United States Steel Corp. (X)

Price: $18.54

Market Cap: $4.4 billion

Trailing 12 Months P/E ratio: 1.1

U.S. steel is a U.S.-based steel producer and seller with roots in the Industrial Revolution. J.P. Morgan, a banker, established the corporation in 1901 to combine other enterprises with Andrew Carnegie's steel enterprise. This former giant has had a difficult time throughout the years due to competition from global competitors and new technologies. However, by selling off a large portion of its lower-margin foreign markets and streamlining its remaining output, X stock has once again established itself as a major player. Additionally, the business has invested in electric arc steelmaking, competing with other global steel companies on its turf.

U.S. Steel runs through three businesses; Tubular Products, Flat-Rolled Products, and U.S. Steel Europe.

ArcelorMittal SA (MT)

Price: $19.85

Market Cap: $16.8 billion

Trailing 12 Months P/E ratio: 1.2

ArcelorMittal (MT) is a Luxembourg-based holding company and an investment in global growth. ArcelorMittal, a steel behemoth, was created in 2006 via the combination of India's Mittal and Europe's Arcelor. The corporation manages iron ore mining operations in seven countries and produces a wide variety of steel products from sites in Europe, Asia, South and North America, and Africa.

The corporation owns and manages the manufacturing of iron ore, steel, and coal mining projects across Europe, Africa, Asia, and America through subsidiaries. The company launched a stock buyback program in July 2022 involving 60.4 million dividends worth approximately $1.4 billion. This year, ArcelorMittal has declared stock buybacks of nearly $3.4 billion.

Steel Dynamics

Price: $70.71

Market Cap: $12.9 Billion

Revenue Growth: 39.1%

EPS Growth: 94.0%

A former employee founded Steel Dynamics, which is trying to adopt a similar strategy. The company specializes in electric arc mills, and its balance sheet is similarly conservative.

Steel Dynamics Inc. is a manufacturer of carbon steel and a recycler of metals. The company sells structural beams, steel bars, flat-rolled sheets of steel, and other goods. On July 20, Steel Dynamics released its Q2 2022 financial results. A substantial rise in net sales, directed by greater shipping and selling values, including other things, nearly doubled net income year over year (YOY).

Nucor Corp. (NUE)

Price: $105.29

Market Cap: $27.6 Billion

Revenue Growth: 34.2%

EPS Growth: 91.9%

Since its founding in 1917 under the name "Nuclear Corporation of America," Nucor has grown to produce a variety of steel products as well as other goods for numerous industries. Although the corporation didn't start running its first steel plant until 1969, it swiftly became the biggest steel manufacturer in the United States while selling off most of its other subsidiaries.

Nucor makes steel and steel-related products mostly out of recycled scrap metal. It produces girders, joists, electrical conduits, bars, beams, sheets, and plates, among other things. The business has operations all over North America. Nucor stated on September 15 that as of September 30, 2022, the stockholder would receive a dividend payment of $0.50 per ordinary share, due on November 10.

Advantages of Steel Stocks

Steel stocks can get profit with more cash flowing into federal infrastructure. An infrastructure program of $1.2 trillion approved by parliament in November 2021 will provide a sizable investment to modernize the country's roads, bridges, and trains during the following five years. Additionally, President Joe Biden has made it mandatory for projects and infrastructure upgrades to employ American steel, which is advantageous for American steel-producing enterprises. Steel stocks are trading at attractive prices compared to their historical levels as of Sept. 2022.

Bottom Line

Commodities like steel are in limited supply globally. Investing in them as a hedge against inflation and a means to diversify your investment portfolio without paying too much is a wonderful way to profit from rising prices. There is a bright future for steel, and initiatives like the Infrastructure Spending Bill and the elimination of tariffs will boost demand.