Steel Stocks: What Will Drive Them Higher?

NEW YORK (TheStreet) -- Steel stocks, in the doldrums since early summer, are in desperate need of a catalyst.

We just ran a story outlining what some of those catalysts might be. No one can deny that strengthening steel prices are what will eventually lift steel stocks into an earnest recovery -- we speak especially of Nucor(NUE), U.S. Steel(X), AK Steel(AKS) and Steel Dynamics(STLD).

>>4 Steel Stocks and How to Trade Them

But several variables could help support prices (could help steel steel, if you'll forgive us the pun) and thus lift stocks in the sector. Here are a few of them:

The price of seaborne iron ore holding up, thus offering some pricing power to steelmakers based in the U.S.

China easing back on steel production, thus reducing the risk of imports flooding into the U.S.

A stronger dollar, which would also reduce the risk of steel imports flooding into the U.S.

The U.S. construction industry offering some sign of life (infrastructure stimulus spending, anyone?), thus boosting the capacity utilization of steel mills in the U.S. Some investors believe that the number must hit at least 80% (it now stands at 70%) before steelmakers can start hiking prices for their products.

Which of these potential catalysts is the most likely to result in a rally in steel stocks? Take out poll below to see what TheStreet has to say....

Which of these potential catalysts is most likely to result in a rally in steel stocks?
	The price of seaborne iron ore China's steel output The fluctuations of the dollar The health of the U.S. construction industry

-- Written by Scott Eden in New York

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