Wells Fargo Says Canada's Steel Retaliation `Irrelevant'

Summary

Wells Fargo analyst Timna Tanners cautions that US steel prices near $1,200 have limited upside after a strong year and could face pressure from imports, seasonality, and new capacity. She says Canada's retaliatory steel tariffs are largely for show and unlikely to affect US pricing. Within steel, she prefers Nucor and Steel Dynamics for their resilience and free cash flow inflection into 2027. She is more constructive on aluminum, citing higher energy input costs and better value in aluminum stocks.

• Timna Tanners sees limited further upside for US hot-rolled coil near $1,200.
• High steel prices can attract imports even with 50% tariffs.
• Seasonality, imports, and new domestic capacity may pressure steel prices.
• Canada's retaliatory tariffs are viewed as mostly for show and irrelevant to US pricing.
• Nucor and Steel Dynamics are preferred for resilience and 2027 free cash flow inflection.
• Aluminum prices are seen stronger for longer due to energy input costs.
• Aluminum stocks are viewed as better value than steel stocks.