This steel isn't so strong. 

U.S. steelmaker stocks have peaked, according to one industry watcher, as recent exemptions granted by the Trump administration are weakening the strength of tariffs put into place in 2017.

The president earlier this week exempted South Korea, Brazil and Argentina, on a product-specific basis, from steel-tariff imports, even after they hit their Section 232-imposed quotas, which limit for national security reasons the countries to a certain amount of exports of steel to the U.S. before getting hit with tariffs.  

Donald Trump's exemptions mirror similar actions taken by George W. Bush after imposing Section 201 steel tariffs in 2002. According to Gordon Johnson of Vertical Group, Bush's moves presaged a massive easing of protections under those tariffs and a subsequent collapse in U.S. steel stocks. 

As such, the analyst is calling for a reduction in the prices of U.S. steel stocks in the coming months, including U.S. Steel Co. (X) , Nucor Corp.  (NUE) ,  ArcelorMittal SA (MT) , AK Steel Holding Corp. (AKS) and Steel Dynamics Inc. (STLD) . 

Nucor and ArcelorMittal were down less than 1% around 3 p.m. Friday, while U.S. Steel, AK Steel and Steel Dynamics were all in the green. 

Weaker seasonal demand, falling scrap prices and excess supply capacity of steel may also hinder the price of steel in the coming months, Johnson argued, which would cut into the bottom line of these companies. 

Worst positioned of all is U.S. Steel, the analyst said, as the company is currently burning through cash to revitalize its facilities. 

Indeed, U.S. Steel on Thursday announced it is investing $750 million to revitalize its flagship Gary, Indiana, plant to supply what it expects to be heightened demand thanks to Trump's steel tariffs.

The company said funds will go toward "significant upgrades" at the 110-year-old plant, which is U.S. Steel's largest and employs 3,800 workers.

Johnson said this revitalization effort means costs will stay elevated through 2020, however, and could expose the company to more unplanned outages as work to improve the plants continues. The analyst is calling for U.S. Steel to earn just $1.6 billion in 2019 before interest, taxes, depreciation and amortization versus consensus Ebitda estimates of $2 billion. 

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