It has been a problem for years, and now the domestic steel industry is fighting back against foreign dumping of steel products in the United States. Six domestic steel producers and California Steel filed trade petitions against five countries — China, India, Italy, South Korea and Taiwan — stating that those countries unfairly traded imports of corrosion-resistant steel and it is causing material injury to the domestic steel industry. The petition alleges that subsidies have been provided to the foreign producers by the governments of those countries.

A new report from Cowen says that the time to buy the top stocks is now and to take advantage of any weakness in the shares to initiate or add to positions. With more cases expected to be filed, this could be huge for the domestic companies being hurt. The Cowen team has three top steel stocks to buy now.

ArcelorMittal

This company has been hit hard over the past year but has rallied off the lows. ArcelorMittal S.A. (NYSE: MT) is the self-described world’s leading steel and mining company, with a presence in 60 countries and an industrial footprint in 19 countries. Guided by a philosophy to produce safe, sustainable steel, the company is the leading supplier of quality steel in the major global steel markets, including automotive, construction, household appliances and packaging, with world-class research and development and outstanding distribution networks.

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The company is also one of the world’s five largest producers of iron ore and metallurgical coal and the mining business is an essential part of the corporate growth strategy. With a geographically diversified portfolio of iron ore and coal assets, ArcelorMittal is strategically positioned to serve its network of steel plants and the external global market. While its steel operations are important customers, the company’s supply to the external market is increasing rapidly.

ArcelorMittal shareholders are paid a 1.52% dividend. The Cowen price target for the stock is $14. The Thomson/First Call consensus target is at $12.61. Shares closed on Thursday at $11.14.

U.S. Steel

The iconic American producer could be poised to rally big. United States Steel Corp. (NYSE: X) is a leading integrated steel producer and Fortune 200 company with major production operations in the United States and Central Europe and an annual raw steelmaking capability of 24.4 million net tons.

The company recently acquired AK Steel’s AKS interest in Double Eagle Steel Coating, a leading electro-galvanized steel maker, in an effort to strengthen its foothold in the automotive space. DESCO’s rolled steel products are used by automakers and suppliers for parts such as doors and body panels. The company’s 700,000-ton electrolytic-galvanizing line will become a part of U.S. Steel’s Great Lakes Works facility in Michigan.

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U.S. Steel investors are paid a small 0.8% dividend. The Cowen price target is $35, and the consensus target is $25.55.

Steel Dynamics

This company is the top steel pick at Cowen now. Steel Dynamics Inc. (NASDAQ: STLD) is one of the largest domestic steel producers and metals recyclers in the United States, based on estimated annual steelmaking and metals recycling capability, with annual sales of $8.8 billion in 2014, more than 7,700 employees and manufacturing facilities primarily located throughout the United States (including six steel mills, eight steel coating facilities, two iron production facilities, over 90 metals recycling locations and six steel fabrication plants).

The company’s $1.65 billion acquisition of Severstal’s Columbus, Miss. facility last fall was a big hit with Wall Street analysts. In fact, many think the acquisition could prove to be accretive on a near- and long-term basis, and it has added to the company’s already solid revenue base.

Steel Dynamics investors are paid 2.5% dividend. The Cowen price target is $27, and the consensus target is $23.88. The stock closed most recently at $22.19.

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With the steel industry getting tough, things could start to improve for the domestic producers. That plus a pickup in the economy could be a recipe for a strong rebound in the industry.

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