Quantcast
U.S. steel, aluminum stocks jump on tariff announcement – Metro US

U.S. steel, aluminum stocks jump on tariff announcement

U.S. steel, aluminum stocks jump on tariff announcement
By Arunima Banerjee and Sruthi Shankar

By Arunima Banerjee and Sruthi Shankar

(Reuters) – Shares of U.S. steel and aluminum companies posted solid gains on Thursday, while major manufacturers fell after President Donald Trump said his administration will impose tariffs on steel and aluminum imports next week.

The overall market dropped, including a 1.3 percent decline for the benchmark S&P 500, after Trump, at a meeting with industry officials at the White House, said the United States will set tariffs of 25 percent on steel imports and 10 percent on imported aluminum.

Among steel stocks, AK Steel Holding Corp gained 8 percent, while U.S. Steel Corp rose 6 percent. Nucor Corp climbed more than 3 percent while Steel Dynamics Inc gained more than 4 percent.

Aluminum producer Century Aluminum Co’s shares rose 7 percent.

A raft of U.S. industrial companies, which are major consumers of steel, saw their shares decline. Caterpillar Inc and Boeing fell by more than 2 percent, while crane maker Manitowoc Co fell by more than 6 percent.

Automaker shares were lower, with General Motors down more than 4 percent and Ford off over 3 percent.

The tariffs could increase not only imported steel prices, but also domestic steel prices, putting them at a competitive disadvantage vis-à-vis their non-U.S. competitors.

“The industrial metal companies, the domestically focused ones, are probably going to benefit from this,” said Art Hogan, chief market strategist at B. Riley FBR in Boston.

“In the longer run we’ve seen that tariffs generally don’t work and actually they generally hurt the economy. In the immediate to longer run it’s probably seen as a step towards trade wars (and) retaliation.”

The Trump administration said the tariffs would protect U.S. industry, but critics said the moves would fail to boost jobs and risked stoking an angry response from China and other trading partners around the world.

Trump, speaking after a meeting with U.S. steel and aluminum makers, said the duties would be formally announced next week.

The U.S. Commerce Department had recommended last month that Trump impose steep curbs on steel and aluminum imports from China and other countries ranging from global and country-specific tariffs to broad import quotas.

(Reporting by Arunima Banerjee and Sruthi Shankar in Bengaluru, additional reporting by Lewis Krauskopf in New York; editing by Bernard Orr and Tom Brown)