Steel Stocks: Analyst Says Buy Nucor; Leave AK Steel On The Shelf

Are steel prices poised for a rebound? Morgan Stanley analysts argue that the recent erosion in steel prices could prove short lived thanks to a mix of headwinds that include higher scrap prices and a healthy U.S. supply demand. Those same analysis recommend using the recent pullback to add to positions among steel producers. But they warn that AK Steel ’s ( AKS ) exposure to electrical and auto steel could be a headwind in the coming years, and replaced it on the list of overweight ratings with rival Nucor ( NUE ).