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 Tenaris S.A. (NYSE:TS) 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).
Is Tenaris S.A. (TS) the Best Steel Stock to Buy According to Billionaires?
A close-up of an oil rig showing the precision engineering required to extract oil and gas.
Tenaris S.A. (NYSE:TS) is a top producer of seamless steel pipes for the global oil and gas sector. The company delivers Oil Country Tubular Goods (OCTG) and line pipe products across North America, Latin America, and the Middle Eastern market.
Amid a tough pricing environment, Tenaris S.A. (NYSE:TS) reported revenue of $2.8 billion for Q4 ended December 31, 2024. This marked a 17% drop year-over-year and a 2% decrease from the previous quarter, driven by lower sales volumes and declining OCTG prices in North America. Despite this, EBITDA rose 6% sequentially to $726 million, aided by cost cuts and partial reversal of a provision tied to Usiminas acquisition disputes. Furthermore, net cash dipped to $3.6 billion after $454 million in share buybacks, $299 million in dividends, and $182 million in capital spending.
Tenaris S.A. (NYSE:TS) experienced strong drilling growth in Argentina’s Vaca Muerta shale. This was countered by Mexico’s sharp downturn due to Pemex’s lowered production goals and fewer rigs. Furthermore, the North American OCTG supply-demand balance improved as imports fell to roughly 30% and inventories normalized to about six months.
Meanwhile, the Middle Eastern market held steady, with Saudi Arabia, the UAE, and Qatar showing notable growth in gas drilling. Tenaris secured a $250 million order for Saudi Aramco’s CCS project, covering 300 km of steel pipelines with delivery starting in Q3 2025, strengthening its regional footprint.
Looking ahead, Tenaris S.A. (NYSE:TS) expects stable margins in Q1 2025, with possible gains in the first half of the year. In addition, the 25% steel import tariffs might raise OCTG pricing in the U.S., increasing profits. Thus, with solid cash reserves, Tenaris is one of the best steel stocks for investors to consider.
Overall, TS ranks 9th on our list of best steel stocks to buy according to billionaires. While we acknowledge the potential of TS, 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 TS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
