U.S. Steel Leads Rally as Investors Cheer Anti-Dumping Measuresby
U.S. companies claim dumping by China and four other nations
China says ruling harmful, will seek to ensure fair treatment
U.S. Steel Corp. and AK Steel Holding Corp. paced gains among metal producers after the U.S. handed down anti-dumping measures on imports of galvanized carbon sheet products that exceeded some analysts’ estimates.
Shares in Pittsburgh-based U.S. Steel and West Chester, Ohio-based AKS surged more than 7 percent on Thursday. They were up 4.8 percent and 4.3 percent, respectively, at 10:03 a.m. in New York.
In a decision announced after the close of regular trading Wednesday, the U.S. Department of Commerce found a higher level of dumping from some South Korean exporters of corrosion-resistant steel, raising the level of potential tariffs to as much as 48 percent from a preliminary cap of 3.5 percent. Chinese producers may now face anti-dumping duties of 210 percent, compared with a preliminary finding of 256 percent in December.
“We view the outcome as stronger than anticipated, with the DOC levying higher duties on imports on all countries excluding China versus preliminary determinations issued in late 2015,” KeyBanc analysts including Philip Gibbs and Tyler Kenyon wrote in a note. Even in the case of China, duty rates “remain prohibitive,” they wrote.
The U.S. government’s announcement marks a final decision in the first of a series of trade cases in which domestic steel producers have accused producers in China and four other countries of selling the metal unfairly. It clears the way for the first duties to be assigned on steel products since the U.S. industry began filing cases a year ago. Companies including U.S. Steel and Nucor Corp. allege that mills in China, South Korea, India, Italy and Taiwan had dumped the metal in the U.S.
The International Trade Commission is scheduled to make its decision next month on whether domestic steelmakers were injured by unfair trade, after which the government would order duties on the products.
The rulings are part of a package of cases involving five different steel products, from basic steel coils to plates used by machinery manufacturers and products that have been treated for strength and flexibility and coated to prevent rust.
The ruling harms the rights of Chinese companies, and China will take measures to ensure their fair treatment, the country’s ministry of commerce said in a statement. The anti-dumping rates imposed on Chinese imports are much higher than those from other regions, which is a discriminatory practice, it said.