Steel stocks have enjoyed a sterling rally in 2016, and the two best performers in the broad S&P 1500 index have been U.S. Steel and AK Steel. Those two stocks have risen about 160 percent and 140 percent, respectively.
However, many doubt that the high-flying names will be able to add to their gains.
Unsurprisingly, the big driver for the stocks has been rising steel prices. While reduced capacity in the industry and increased taxes on Chinese steel do effectively explain the rally, they do not suggest that one would be wise to buy the stocks now, according to S&P Global equity chief investment officer Erin Gibbs.
"There might be some growth in 2017, but again, it's really not expanding the capacity and we see the level of steel being more held at the status quo at this point," Gibbs said this week on CNBC's "Trading Nation."