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Things aren’t getting any better for the U.S. steel sector.

Monday morning, Wall Street cut ratings on five steel-related stocks, with no offsetting upgrades. It is a capitulation that prices aren’t going to improve despite higher raw-material costs or import tariffs.

Goldman Sachs analyst Matthew Korn cut Schnitzer Steel (ticker: SCHN) to the equivalent of Sell from Hold. He has a $23 price target for Schnitzer shares. “We believe weakening global scrap markets have added substantial risk to profitability,” Korn wrote in a Monday research report. Schnitzer makes steel from scrap metal in electric furnaces—like the largest domestic steel company Nucor (NUE). Schnitzer also has a scrap collection-and-selling operation.

Korn also cut Commercial Metals (CMC) to Hold from Buy, but left his price target unchanged at $20 a share. “Prices for long steel products appear at risk,” the analyst said in his report. Long products are things such as beams and bars. Flat steel product, for comparison, are coils that become products such as cars and perhaps ironing boards.

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That wasn’t all the bad news for the sector on Monday. J.P. Morgan analyst Michael Gambardella also cut a number of steel stocks. He took his rating on iron-ore producer Cleveland-Cliffs (CLF) to Hold from Buy, drastically cutting his target price from $14 a share to $8. He also cut AK Steel (AKS) to Sell from Hold and United States Steel (X) to Hold from Buy.

“We are lowering our estimates and price targets for the steel companies to reflect a more flattish steel price environment,” Gambardella wrote in a Monday research report. Steel prices have faced pressure from “concerns about supply additions planned for the next several years, continued uncertainty surrounding trade, and some softening in demand.”

Tariffs and higher raw-material prices could have led to rising domestic steel prices, but the economy intervened. Weakening U.S. industrial production, which peaked in December 2017, has cut demand for steel product, leading to the idling of steel facilities around the country.

What’s more, tariff policy isn’t having all its intended effects. Last week, when giving disappointing guidance, U.S. Steel said higher steel imports from foreign countries coming into Europe were hurting its European steelmaking operations. U.S. tariffs have, in part, shifted the geographic flow of steel without fully insulating domestic producers.

Price is probably the most important factor for steel stocks and it is difficult to buy into the sector without any price momentum. In March, Barron’s suggested four stocks to ride a rally in steel prices. Our caveat was that steel prices needed to rise and our catalyst for a price increase was the tragic dam collapse in Brazil, which sent iron-ore prices soaring. (Brazil is a globally dominant producer of iron ore.) Domestic steel prices, however, never rose.

Steel stocks are in deep-value territory now. The five stocks downgraded Monday have fallen, on average, 35% over the past year, compared with a 1% gain for the Dow Jones Industrial Average over the same span. And it will likely take an improving economy to get investors excited about steel again, regardless of what happens on the trade and tariff front.

Write to Al Root at allen.root@dowjones.com