After a rough start to 2017, steel investors may have a better go of it in the second half of the year. Deutsche Bank analyst Jorge Beristain has upgraded a handful of steel and aluminum stocks and is now constructive on steel prices following a sluggish second quarter. U.S. hot-rolled coil prices declined 9 percent in the second quarter, potentially masking a 4-percent year-to-date uptick in apparent steel demand based on increasing U.S. economic activity.

In addition to rising demand, supportive trade policy could also serve as a positive catalyst for steel prices, Beristain said.

“We believe underlying demand will recover and imports subside once Section 232 is formerly released (end-June last timeline) and signed into law by President Trump soon after (between 0 and 105 days),” Beristain wrote.

Deutsche Bank has cut its 2017 HRC steel price forecast by 2 percent to $620/ston but maintains its 2018 forecast of $600/ston. The firm also cut its 2017 forecasts for nickel by 7 percent to $9,832/t and is calling for iron ore prices to remain around $50/t.

Now that Deutsche Bank sees steel prices stabilizing, the firm has upgraded several steel and aluminum stocks:

• Upgraded United States Steel Corporation X 2.11% from Hold to Buy.
• Upgraded AK Steel Holding Corporation AKS 2.11% from Hold to Buy.
• Upgraded Century Aluminum Co CENX 2.13% from Sell to Hold and raised price target from $10 to $15.
• Raised…

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