Aggressive Value
Deep-Value & Asymmetric Investor, 25 Years in Markets
Cleveland-Cliffs sets the price of grain-oriented electrical steel with zero US competition, and the AI buildout won't slow that demand. Per @Vaelis_X, its Butler Works plant is the only US producer of this steel for large power transformers, where it is about 25% of cost, with transformer lead times averaging 128 weeks and prices up 77% since 2019. x.comÂ
US steel producers Steel Dynamics, Nucor and Cleveland-Cliffs benefit from the AI data-center buildout. Every hyperscaler campus needs over 200,000 tons of structural steel and rebar, and hundreds are being built. Tariffs on imported steel let domestic mills keep more of the margin. Steel and industrial metals rank among the hottest subsectors smart money is buying, with steel up 19% this month. x.com x.comÂ
Cleveland-Cliffs is one of the best stocks in the entire market because investors are overlooking how much steel will be needed to build all the new data centers. x.com x.comÂ
Scarcity across grid equipment, electrical steel, HBM, turbines and foundries leaves their suppliers with upside through 2028. The 2026-28 bottleneck scores are 94, 94, 93, 88 and 86 respectively; they measure constraints, not market size. The list covers Hitachi, Powell, TBEA, Nippon Steel, POSCO, Cleveland-Cliffs, Samsung, SK hynix, Micron, Howmet, TSMC, Intel and SMIC. Powell has the highest remaining upside at 7.5/10 with 3.2 risk; Intel scores 7.4 upside but 6.8 risk. x.comÂ
Steel is pricier and still in short supply, factories told ISM, a backdrop for Nucor, the biggest US steelmaker. The stock just bounced at a higher low. x.comÂ
NBA-game logo exposure could draw speculative traders to Cleveland-Cliffs and fuel a meme-style run. January 15 $20 calls look like a very solid asymmetric trade if they take notice. x.comÂ
Cleveland-Cliffs controls a quiet bottleneck in the power-transformer buildout. Grain-oriented electrical steel gates every large transformer, and Cliffs' Butler Works in Pennsylvania is the only US facility qualified to make it. Transformer lead times already run about 36 months, and data center grid interconnections compress the queue further. The thesis breaks if domestic transformer capacity ramps meaningfully or the Defense Production Act reshuffles allocation; neither looks imminent. x.comÂ
Cleveland-Cliffs' new Pentagon contract isn't priced into the stock at all. This month it received a five-year, $400 million sole-source, no-bid contract to supply up to 53,000 short tons of GOES steel from its Butler, Pennsylvania mill for strategic stockpiling across all five service branches. x.comÂ
JFE Holdings is a sleeper that goes hand in hand with Cleveland-Cliffs: Cleveland-Cliffs makes grain-oriented electrical steel, and JFE turns that steel into magnetic coils. x.com x.comÂ
Steel is in a strong bull market since the tariff-panic lows, driven by strong demand and a weakening US dollar. All metals are moving higher, though miners are hampered by higher oil prices. x.comÂ