While steel prices have dropped about 50% from 2021 highs spurred by soaring post-pandemic demand, they still remain about double where they sat prior to the pandemic. Steel companies like Steel Dynamics and Nucor are taking advantage of high cash flows to make investments for the future, repurchase shares, and increase dividends to shareholders. Steel Dynamics led the way with a monster 31% dividend boost earlier this year. 

Last week the company also said it was using its available cash and cash flow from operations to make a $2.2 billion investment in an aluminum rolling mill. The company estimates the project will begin commercial production in early 2025 and will serve a domestic aluminum industry with an increasing supply deficit.  

Investors may not be reacting specifically to that news again today. But combined with the strong current position for the industry, historically high pricing, and investments that should spur future growth, investors are extending steel stocks' earnings bounce this week.