We recently published a list of 10 Best Steel Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Reliance, Inc. (NYSE:RS) stands against other best steel stocks to buy according to billionaires.

The steel sector remains vital to global infrastructure and manufacturing, and continuous growth is expected. The Business Research Company reported that the steel processing market is expected to grow from $714.7 billion in 2024 to $733.2 billion in 2025 at a CAGR of 2.6%. This growth depends on industrial expansion, infrastructure investments, and demand from the construction, automotive, and energy sectors. Furthermore, innovations in steel alloys, smart infrastructure, and a shift toward electric vehicles (EVs) will drive future growth. This bright future projection comes on the back of a strong sector performance in the recent past.

The steel sector has delivered an 8.92% year-to-date (YTD) return, beating the broader market’s decline of over 4%. This shows investor trust and confidence amid infrastructure investments and solid demand. Furthermore, according to the World Steel Association, the automotive sector drives 12% of global steel demand. The shift to electric vehicles has boosted demand for lightweight, high-strength steel. S&P Global Mobility expects battery EV sales to reach 15.1 million units in 2025, up 30% from 2024, making up 16.7% of light vehicle sales. Due to higher steel consumption, this trend is expected to benefit steel producers investing in advanced materials.

However, decarbonization remains crucial, as steelmaking causes 7% of global greenhouse gas emissions, according to a report by PwC. Stricter rules are pushing producers toward greener methods, and by 2040, at least 25% of the global steel capacity is expected to be decarbonized. Coal-based furnaces are at risk of becoming stranded assets, with potential losses of up to $518 billion. Thus, many companies are switching to electric arc furnaces (EAFs), which can be carbon-neutral with renewable power. Furthermore, according to Research and Markets, the global steel scrap market, sized at 543.2 million metric tons in 2024, should reach 727.1 million metric tons by 2030 at a CAGR of 5.0%. Recycling 1,000 kg of steel saves 1,400 kg of iron ore, 740 kg of coal, and 120 kg of limestone. Thus, steel recycling drives sustainability by cutting energy use and consumption of raw materials.

Moreover, government policies continue to shape the industry, such as Trump’s 25% tariff on steel and aluminum imports. This was aimed at helping U.S. manufacturers but raised costs and impacted prices across consumer and industrial goods. Recently, a 25% tariff was imposed on Mexican steel melted and poured outside North America to target transshipments.

While regulations and trade policies will affect costs, the steel industry is set for growth in 2025, backed by infrastructure spending, automotive demand, and green investments. The ability to innovate and adapt to decarbonization will be key to driving long-term success.

Methodology

To curate a list of the 10 Best Steel Stocks to Buy According to Billionaires, we analyzed Insider Monkey’s exclusive database of billionaire stock holdings. We selected the 10 best stocks to buy based on the highest number of billionaire investors, updated as of Q4 2024. For the stocks with the same number of billionaire holdings, we have used the total value of billionaire holdings as a secondary metric to rank the stocks.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A technician in a lab coat overseeing the precision fabrication process of metals.

Reliance, Inc. (NYSE:RS)

Number of Billionaire Investors: 10

Reliance, Inc. (NYSE:RS) operates as a leading metals service center, providing various metal products, including carbon steel, stainless steel, aluminum, and specialty alloys. The company serves critical sectors such as non-residential construction, manufacturing, transportation, aerospace, and energy, with about half of its orders involving value-added processing.

Although Reliance, Inc. (NYSE:RS) faced many challenges, it outpaced industry trends in Q4, which ended December 31, 2024. Same-store tons sold grew 2.8% year-over-year, while total tons sold jumped 6.7%, far exceeding the industry’s 3.6% drop. However, lower steel prices squeezed margins, resulting in Q4 earnings of $2.22 per share, which included a negative LIFO adjustment. The company expects a 6-8% increase in tons sold for Q1 2025 due to steady demand in the construction and manufacturing markets.

Moreover, Reliance, Inc. (NYSE:RS) is investing $325 million in 2025, mainly to upgrade processing capabilities and expand existing facilities. The company expects stable demand across key markets, with infrastructure spending and manufacturing reshoring offering long-term growth opportunities. Also, potential tariffs in March 2025 might reduce imports, supporting domestic steel prices.

However, despite economic uncertainty and fluctuating steel prices, Reliance, Inc. (NYSE:RS) is well-positioned to handle market shifts with its solid balance sheet and strategic focus on value-added processing. With ongoing growth in data center construction, electrical grid updates, and defense projects, RS is one of the best steel stocks.

Overall, RS ranks 5th on our list of best steel stocks to buy according to billionaires. While we acknowledge the potential of RS, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.