It has become pretty clear, or at least it should be to nations around the world that are not committed to fair trade, if you don’t play ball with the Trump administration, there will be consequences. On Thursday, the U.S. Department of Commerce announced that the exemptions granted to Canada, Mexico and the European Union would expire at midnight, and those regions would now be subject to 25% tariff on steel imports and 10% on aluminum.

While the president can change his mind at any time, the bottom line is that due to higher demand and fewer imports, the price for steel is going higher, and the analysts at Merrill Lynch feel that numerous companies in the industry look poised to benefit.

We screened the stocks in their new report for those rated Buy and found five that look like solid picks now.

Allegheny Technologies

This company has hit our insider buying screens in the past and also makes good sense for long-term accounts. Allegheny Technologies Inc. (NYSE: ATI) produces and sells specialty materials and components worldwide. The company operates through two segments.

The High Performance Materials & Components segment provides various high-performance materials, including titanium and titanium-based alloys; nickel- and cobalt-based alloys and superalloys; zirconium and related alloys, such as hafnium and niobium, advanced powder alloys, and other specialty materials, in long product forms of ingots, billets, bars, rods, wires, shapes and rectangles, and seamless tubes, plus precision forgings, castings, components and machined parts.

The Flat-Rolled Products segment produces, converts and distributes stainless steel, nickel-based alloys, specialty alloys, and titanium and titanium-based alloys in various forms, including plate, sheet, engineered strip, and Precision Rolled Strip products, as well as grain-oriented electrical steel. This segment serves oil and gas/chemical and hydrocarbon processing industry, electrical energy, automotive, food processing equipment and appliances, construction and mining, electronics, communication equipment and computers, and aerospace and defense markets.

The Merrill Lynch price target for the shares is $32, and the Wall Street consensus target is $32.80. The shares closed Thursday’s trading at $28.52 apiece.

Nucor

This top steel company could do very well if the economy continues to pick up and the administration’s infrastructure push comes back to the forefront. Nucor Corp. (NYSE: NUE) is one of North America’s largest steel producers, with almost 27 million tons of finished steel capacity at 23 mini-mills throughout the United States. The company’s downstream steel products business includes rebar fabrication, steel joists/deck, cold finished bars, fasteners, building systems and wire mesh. Nucor also has 5 million tons of scrap processing capacity.

Nucor has always kept a very conservative balance sheet and is poised for slow but steady growth next year and beyond, especially if a huge infrastructure build-out becomes a reality. Some think that continued demand from the rebuilding of large parts of Houston after Hurricane Harvey and storm damage in Florida and Puerto Rico could also be a positive.

Nucor investors are paid a solid 2.37% dividend. Merrill Lynch has a $75 price target, essentially in line with consensus target of $75.60. The stock closed Thursday at $64.19 a share.

Reliance Steel & Aluminum

Merrill Lynch is positive on this top service center play. Reliance Steel & Aluminum Co. (NYSE: RS) provides metals processing services and distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium and specialty steel products. Its primary processing services are cutting, leveling, sawing, machining and electropolishing.

The company also fabricates and distributes structural steel components and parts; provides metal components and inventory management services; and distributes alloy, carbon and stainless steel bar and plate products, as well as steel and nonferrous and aerospace metals, including aluminum, steel, titanium, nickel alloys and aluminum bronze, offering full or cut to size materials.

Reliance is the largest metals service center company in North America, operating in more than 200 locations. About half of its business is warehousing and the other half involves some sort of value-add processing or fabricating. Non-ferrous volume comprises about 30% of its annual shipments. The company tends to sell small spot-priced tons to customers, the majority requiring delivery within 24 hours.

Shareholders receive a 2.14% dividend. The $106 Merrill Lynch price target is more than the posted consensus target of $102. The stock closed Thursday at $94.57.

Steel Dynamics

This is another company that analysts remain very positive on. Steel Dynamics Inc. (NASDAQ: STLD) operates six steel mini-mills in Indiana, Virginia, Mississippi and West Virginia. Production capacity has been nearly 10 million tons, of a total 110 million U.S. capacity.

The company makes flat-rolled products, special/merchant bars and structural steel products. Steel Dynamics can process about 7 million tons of ferrous scrap and has a downstream operation that processes finished steel.

Shareholders are paid a 1.35% dividend. Merrill Lynch has set its price target at $54. The consensus target is $53.93, and the stock closed most recently at $49.43.

U.S. Steel

This venerable steel producer remains a favorite on Wall Street. United States Steel Corp. (NYSE: X) produces and sells flat-rolled and tubular steel products in North America and Europe. It operates through three segments. Its Flat-Rolled Products segment offers slabs, rounds, strip mill plates, sheets and tin mill products. This segment serves customers in the automotive, consumer and the combined industrial, service center and mining commercial markets.

The Tubular Products segment offers seamless and electric resistance welded steel casing and tubing, as well as standard and line pipe and mechanical tubing products primarily to customers in the oil, gas and petrochemical markets. The company also provides railroad services and owns, develops and manages various real estate assets.

And its U.S. Steel Europe segment provides slabs, sheets, strip mill plates, tin mill products and spiral welded pipes, as well as heating radiators and refractory ceramic materials. This segment serves customers in the construction, service center, conversion, container, transportation, appliance and electrical, oil, gas and petrochemical markets.

Shareholders receive a 0.54% dividend. The Merrill Lynch price target is $50. The consensus target is $45.93, and the shares closed on Thursday at $36.87.

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The weak dollar has been very helpful to the industry for the past 18 months, but it has begun to strengthen as the Federal Reserve interest rate increases are kicking in, so that tailwind is diminishing. However, with pricing firm, and export potential and demand at home still strong, all these stocks make sense for growth investors, especially after significant price pullbacks. Toss in the tariffs, and the sector looks to remain solid.

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