NEW YORK, April 20 U.S. steel stocks rose on
Thursday following news U.S. President Donald Trump will sign a
directive asking for a speedy probe into whether imports of
foreign-made steel are a U.S. national security risk.
Trump was expected to meet with leaders of U.S. steel
companies and to sign the memorandum related to section 232 of
the Trade Expansion Act of 1962 at a White House event this
U.S. Commerce Secretary Wilbur Ross said on Thursday an
investigation he launched will determine whether Chinese and
other foreign-made steel is a threat to U.S. national security.
Ross said China has increased its steel exports to the
United States despite promises to reduce them and that it now
commands 26 percent of the U.S. market.
Shares of AK Steel were up 5.3 percent while shares
of U.S. Steel were up 4.7 percent. The S&P 1500 steel
index was up 2.9 percent.
Shares of Steel Dynamics, which reported results
late Wednesday, were up 4.2 percent, while Nucor, which
reported early Thursday, was up 2 percent.
The law allows the president to impose restrictions on
imports for reasons of national security.
The last time the U.S. statute was used was to restrict
imported oil, while former President George W. Bush attempted to
slap tariffs on steel imports in 2002 under a different means,
according to a research note from Height Securities.
"Making the case that steel imports threaten national
security may be a... high legal hurdle, although we suspect the
Trump administration will argue the potential loss of domestic
steel manufacturing capacity could hinder the ability to respond
to urgent defense needs," the Height note said.
U.S. steel shares shot up after the Nov. 8 U.S. election
amid optimism of increased infrastructure spending.
(Reporting by Caroline Valetkevitch; Editing by Nick Zieminski)