** Jeffries lifts PT on U.S. steel makers Steel Dynamics STLD.O and Cleveland-Cliffs CLF.N, citing stronger domestic pricing outlook and improved risk/reward as imports decline

** Brokerage notes Steel Dynamics exposure to flat-rolled steel positions it well for seasonal demand tailwinds as construction eases and industrial activity picks up

** Despite its elevated debt levels, Cleveland-Cliffs demonstrated strong cost control and operational resilience, says Jefferies

** Jefferies sees STLD and CLF benefiting as falling imports outpace U.S. capacity growth

** Brokerage maintains rating on STLD at "buy " and CLF at "hold"

** Shares of STLD up 1% at $143, while CLF also rise 1% to $13 in early trading

** S&P 400 Steel sub index .SPMDCSTEEL has risen 29.8% YTD

(Reporting by Apratim Sarkar in Bengaluru)

((Apratim.Sarkar@thomsonreuters.com))