2 Top Steel Stocks to Buy in September
Steel is a key building block of the modern world, going into everything from vehicles to buildings to household appliances. Steel demand is set to be robust, with a boom in mega projects (like data centers), each worth at least $1 billion. There have now been $1.4 trillion worth of mega projects announced since 2021, all of which will make heavy use of steel. But steel stocks are cyclical, so make sure you stick with companies that can best weather the full steel cycle. Here's what you need to know.
There are two broad ways to make steel, blast furnaces and electric arc mini-mills. Blast furnaces have been around for a very long time. They use metallurgical coal and iron ore to create primary steel. These mills are vital to the world's steel production, but blast furnaces are very expensive to operate. When steel demand is strong, blast furnaces tend to make a lot of money because they operate at high utilization rates. When steel demand is weak, they often lose money -- sometimes quite a bit of money -- because they aren't selling enough steel to cover their operating costs.
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Source Fool.com
