The investment firm is bullish on the current state of the steel sector, which is "clearly a super cycle," according to analyst Curt Woodworth.
"The traditional relief valve of excess China steel production has been turned off owing to ex-China tariffs and more recently China efforts to limit excess production both domestically and in the seaborne market," Woodworth said, according to Bloomberg.
U.S. steel companies are best-positioned globally to benefit from the current environment as they are set to achieve the widest margins, according to Credit Suisse.
U.S. Steel shares at last check were rising 6.8% to $26.36. They'd set a 52-week high $27.40 on March 31.
The Pittsburgh company last week reported first-quarter earnings that topped estimates, though revenue missed analysts' targets.
“Strong market conditions and our well-timed acquisition of Big River Steel are allowing us to drive significant earnings growth,” Chief Executive David Burritt said in the statement in March.
Last month, Morgan Stanley's Carlos De Alba said U.S. Steel's first-quarter revenue guidance shows significant leverage in U.S. Steel's higher fixed-cost operating base and he expects its profitability to continue to improve in the coming quarters.
De Alba maintained his equal-weight rating and $24 price target, but still advises investors to wait "on the sidelines for a better entry point before turning more constructive."