Daily Management Review

As Trump Orders Probe Of Imports, U.S. Steel Shares Jump


04/21/2017




As Trump Orders Probe Of Imports, U.S. Steel Shares Jump
As President Donald Trump began a probe into whether imports of foreign-made steel are a national security risk, the U.S. steel stocks rallied on the market.
 
The investigation was a response to Chinese exports of steel reaching 26 percent of the U.S. market, said U.S. Commerce Secretary Wilbur Ross.
 
Trump signed a directive asking for a speedy probe under section 232 of the Trade Expansion Act of 1962 at a White House meeting that included executives of several U.S. steel companies. For reasons of national security, the law allows the president to impose restrictions on imports.
 
And as the rally accelerated after the midday signing of the executive order, the S&P 1500 steel index shot up 5.2 percent, its biggest daily percentage gain since Nov. 22.
 
The steel index had been drifting lower since February even though steel shares had surged after the Nov. 8 U.S. election on optimism over increased infrastructure spending under Trump.
 
While steel analysts said declining iron ore prices and other factors have weighed on industry shares, investors in recent months have begun to question how soon Trump's pro-growth policies might be implemented.
 
While Nucor, which reported early Thursday, rose 4.7 percent, shares of Steel Dynamics, which posted results late Wednesday, were up 6.8 percent.
 
While U.S. Steel rose 7.4 percent, shares of AK Steel jumped 8.6 percent.
 
Phil Gibbs, equity research analyst, KeyBanc Capital Markets said that the Trump administration's news likely served as a "symbolic positive," even though more stable iron ore prices and earnings might have also boosted the sector.
 
"People took it to be a positive because (while) the last couple of trade cases maybe didn't go the side of U.S. producers, there still is some support from the government for this industry and ... the group had been a sizable underperformer through most of the last two months."
 
He added that China will remain a crucial factor in steel prices over the long haul.
 
Gibbs said that investors who had shorted the stocks also could have been covering their positions.
 
According to a research note from Height Securities, while former President George W. Bush attempted to slap tariffs on steel imports in 2002 under a different means, the U.S. statute has been used to restrict imported oil.
 
On the other hand, despite U.S. President Donald Trump's decision to order a probe into whether imports of foreign-made steel hurt U.S. national security, shares in Chinese steel companies were mostly up in morning trade on Friday.
 
News agency Reuters reported on Friday quoting a steel industry source that the industry feels that all measures including filing a complaint with the World Trade Organization (WTO) in response to "deepening U.S. trade protectionism" should be considered by South Korea's government and steel industry.
 
The source's comments came after Trump’s launching of a trade probe against China and other exporters of cheap steel into the U.S. market.
 
The government is considering its response to the U.S. move, a senior official at South Korea's trade ministry reportedly told Reuters.
 
"We are open to all possible options including filing a complaint with WTO but nothing has been decided. We will decide after listening to opinions of the Korean steel industry," the official said.
 
(Source:www.reuters.com) 






Science & Technology

Baidu comes up with a self-driving bus

Developing countries are stepping up their own space programs

McAfee: Number of cybercrime attacks skyrocketed

RemoveDebris Mission To Clear Debris Of In Orbit Over Earth

British experts: Online gambling is dangerous

Vodafone Chooses ‘Highly Trafficked Urban’ Space As Its 5G Testing Grounds

Space To Become A Travel Destination By 2022

Dream Of Immortality Can Be Realised By 2045

Predicting A Patient’s Death Might Be Possible With Google’s Machine Learning Tool

Are online DNA databases dangerous?

World Politics

World & Politics

Le Maire: The US refused to release France from anti-Iran sanctions

One Belt, One Road is facing difficulties around the world

Qatar to raise $ 4 billion to buy Eurofighter Typhoon jets

The UK sets to turn all cars zero-emission by 2030

Brexit Minister’s Resignation States May’s Brexit Policies Weakening The Country’s Stance

Global Plastic Waste Can Wrap The Planet ‘Seven Times Every Hour’

ILO: World has to pay more attention to children and elderly care services

German ruling coalition is under threat of disintegration