AK Steel Holding Corp. led a U.S. steelmaker rally after the Department of Commerce imposed tariffs of as much as 266 percent on imports of cold-rolled steel after determining they were priced unfairly.
AK Steel surged 7.2 percent to a seven-month high at 9.37 a.m. in New York while Pittsburgh-based U.S. Steel Corp. climbed 6.6 percent. They’re among U.S. producers in line for relief from a surge of imports that helped push down domestic prices to six-year lows.
The U.S. government imposed tariffs of 266 percent on imports from China, with goods from Brazil, India, South Korea, Russia, Japan and the U.K. also subject to duties, the Commerce Department said in a preliminary decision Tuesday.
“We think the duties came in above expectations and see this as a near-term positive for pricing,” Anthony Rizzuto, a New York-based analyst at Cowen and Co., said in a report Wednesday.
Shipments from Brazil will face 39 percent penalties, and South Korean producers will face taxes of as much as 6.9 percent after the seven countries were found to have dumped the product at unfairly low prices in the U.S. market.
This is the second time since December that the U.S. government has penalized foreign steel producers for dumping steel. Domestic producers including Nucor Corp., U.S. Steel and AK Steel began filing trade cases accusing some global competitors of unfair subsidies and other illegal trade practices in June.
In December, the government found that China, India, Italy and South Korea had dumped corrosion-resistant steel in the U.S. and levied taxes of 256 percent on imports from China. Other duties ranged from 3 percent to 9 percent. Regulators had previously determined that hot-rolled, cold-rolled and corrosion-resistant steel from China and other trading partners has been unlawfully subsidized.
Imports of cold-rolled steel fell by 9.4 percent in 2015 to 2.43 million tons, according to data compiled by Bloomberg from the U.S. Census Bureau.