Nucor, Steel Dynamics, Cleveland-Cliffs stocks rise as US-Canada trade talks fail

Shares of major US steel and aluminum producers rose Monday as investors reassessed the implications of the breakdown in US-Canada trade negotiations.

Nucor NUE gained about 4%, while Steel Dynamics also rose roughly 4%. Cleveland-Cliffs climbed about 7% and Century Aluminum advanced around 5%.

The gains came after the stocks fell sharply last week on expectations that Washington and Ottawa were close to a trade agreement that could have reduced tariffs on Canadian steel and aluminium.

A tentative deal could have potentially lowered tariffs on some Canadian steel and aluminum exports to 25%, according to a Bloomberg report last week.

That prospect raised concerns among investors that increased Canadian competition could put pressure on US producers and domestic steel prices.

Those expectations have now been reversed.

Trade negotiations collapsed Friday, with the US subsequently imposing 50% tariffs on some Canadian products from Saturday.

Canada has responded by announcing retaliatory tariffs that will take effect Sept. 8.

The breakdown therefore leaves the existing US tariff regime intact and has renewed expectations that domestic steel producers could benefit from tighter competition from Canadian imports.

How tariffs have helped US steel prices remain elevated

While movements in US steel prices have, for the most part, been driven primarily by domestic supply-side factors, tariffs have remained an important part of the market equation.

By restricting access to foreign-made steel, the measures have shielded US producers from overseas competition and reinforced their position in the domestic market.

Data from SteelBenchmarker shows just how wide that pricing gap has become.

US hot-rolled band (HRB) prices reached $1,208 per metric ton on June 24, their highest level since April 2023.

That compared with $780 per ton in Western Europe and $490 in the global steel export market, leaving US HRB prices 54% above European levels and 146% higher than the global benchmark.

Nucor remains a standout

Nucor remains down about 6% over the past five trading sessions despite Monday's rebound, but the stock has gained roughly 50% this year.

Last week's selloff contrasts with the strong reaction to the company's second-quarter results in July.

Nucor shares jumped 7.2% after the company reported results that exceeded Wall Street expectations.

Revenue rose 23% year over year to $10.4 billion (approx. ₹977.4 billion), while adjusted earnings per share reached $4.84.

The company's Steel Mills segment was particularly strong, with pretax earnings surging 84.5% to $1.6 billion (approx. ₹146.6 billion).

Higher steel prices, strong volumes and record steel mill shipments helped drive the performance.

Analysts expect Nucor's fiscal 2026 earnings per share to rise 132.8% to $17.95.

The company has beaten consensus estimates in three of the past four quarters.

Wall Street remains broadly positive on the stock. Among 16 analysts covering Nucor, 13 have a Strong Buy rating, and three have Hold ratings.

Steel Dynamics has additional growth drivers

Steel Dynamics has also delivered strong gains this year, with the stock up about 35%, even though the stock is down by 8% in the last five trading sessions.

The company reported second-quarter adjusted earnings per share of $3.69, slightly below the $3.76 analyst consensus.

Revenue, however, reached $6.1 billion (approx. ₹573.3 billion), exceeding the $5.6 billion (approx. ₹523.5 billion) estimate and increasing from the same period a year earlier.

Net income rose to $534 million (approx. ₹50.2 billion) from $299 million (approx. ₹28.1 billion) a year earlier.

Beyond the immediate tariff impact, both Nucor and Steel Dynamics have exposure to one of the most significant sources of industrial demand in the US economy: data-center construction.

Hyperscale technology companies have continued to pour capital into artificial intelligence infrastructure, creating demand for steel used in data centers and related construction.

That exposure, combined with reshoring, infrastructure investment and broader US manufacturing activity, has helped the two companies outperform the broader steel sector.

Tariffs provide a near-term tailwind but details on Canada's retaliation awaited

The collapse of the US-Canada trade talks could therefore provide a near-term catalyst for domestic steelmakers.

Keeping higher tariffs on Canadian steel and aluminum can reduce the attractiveness of imported material and potentially support US prices.

That would be particularly beneficial for producers with significant domestic operations.

However, investors will still need to monitor the potential impact of Canada's retaliation.

Ottawa has said its measures will target sectors including steel, dairy, agricultural equipment and pulp and paper, with the tariffs expected to broadly match US measures on a “dollar for dollar” basis.

For now, however, the market appears to be treating the breakdown in negotiations as a positive development for US steel producers.

Sector swings like these are typically closely watched by traders monitoring exposure to tariff-sensitive names through trading platforms.