U.S. Steel Corp. (X), the nation’s largest producer of the metal by volume, fell the most in 17 months after the Department of Commerce rejected its claim that South Korea is selling steel tubing into the U.S. below cost.
U.S. Steel fell 5.8 percent to $25.18 at 10:52 a.m. in New York, after declining as much as 7.3 percent, the biggest intraday drop since Aug. 23, 2012.
The Commerce Department announced its preliminary ruling -- including the imposition of anti-dumping duties on imports from eight other countries -- after the close yesterday. A final determination may be made in July, with the U.S. International Trade Commission making a final decision by Aug. 21, the department said in a statement.
“The level of proposed duties was disappointing for domestic producers, particularly as Korea, by far the largest exporter, was assigned no proposed duties,” Timna Tanners, a New York-based analyst at Bank of America Merrill Lynch, said in a note yesterday.
Dumping occurs when a foreign company sells a product in the U.S. at less than its fair value, according to the department. Yesterday’s decision applied import tariffs on so-called oil country tubular goods, or OCTG, from India, the Philippines, Saudi Arabia, Taiwan, Thailand, Turkey, Ukraine, and Vietnam.
The trade complaint was filed by U.S. Steel and other domestic producers on Dec. 18.
OCTG are iron and steel pipes and tubes used by oil and gas drillers. U.S. Steel is the largest domestic producer. Pipe and tube-makers can make OCTG from flat-rolled steel, which is produced by companies including Nucor Corp. (NUE), the largest U.S. steelmaker by market value.
The ruling is “marginally negative for U.S. flat-rolled producers overall to the extent that it takes away from what could have been U.S.-made products,” Tanners said in a telephone interview today.
A spokeswoman for Nucor couldn’t immediately be reached for comment.
U.S. Steel said it’s disappointed with the ruling. The Commerce Department failed “to deal with important issues at this stage of the investigations,” the Pittsburgh-based company said in an e-mailed statement.
“The determinations do confirm the existence of large-scale dumping in the market -- something that has caused extensive injury to the domestic industry,” it said.
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