Shares of U.S. Steel (X) - Get Report , Steel Dynamics (STLD) - Get Report , and AK Steel (AKS) - Get Report were all plunging in Thursday afternoon trading after Credit Suisse downgraded all three steelmakers to "neutral" from "outperform."

AK Steel was the biggest loser, falling 10.07% to $9.91. US Steel was down 6.47% to $32.94, while Steel Dynamics was limping 3.18% down to $35.89.

The downgrades came as part of a note from analyst Curt Woodworth, who argued that the price for flat rolled steel is due for a decline as more domestic blast furnaces come online in the first quarter of 2017.

"In our view, the major change to the U.S. market dynamic in 2017 will be the substantial amount of incremental hot rolled sheet capacity that will compete aggressively with imports for market share," Woodworth wrote.

Steel proponents have argued that President-Elect Donald Trump's proposed $1 trillion infrastructure investment over the next decade will spur on domestic steel production for major construction projects. This thesis has helped steelmakers lock in most of the gains they've made since Trump's upset victory in the November election.

Woodworth was not particularly sympathetic to this line of thinking, arguing that the basic assumptions of Trump's policy - which proposes that infrastructure projects will be funded through public-private partnerships - may be unfounded and that infrastructure investment alone won't make a tremendous impact on steel production.

"We don't believe private sector investment can fund anywhere near the amount of spend Trump is proposing and note that over the past decade, very few infrastructure projects have been financed by public-private partnerships," he wrote.

A $100 billion annual investment in construction would result in 3.5 million ton uptick in annual steel demand, Woodworth added; good, but not good enough to make up for depressed demand for plate steel brought on by continued softness in oil and gas projects.

"Such spending is likely to have very limited impact in the U.S. flat rolled market," he wrote.

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