Steel stocks rose earlier this week following reports that President Donald Trump could soon place tariffs on foreign steel companies.
According to a report from CNBC, U.S. Steel climbed more than 2% while AK Steel and Nucor each traded at 3% and 1% higher, respectively.
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Meanwhile, steel companies from around the would wait with bated breath on the Department of Commerce’s findings into its Section 232 investigation, which will determine whether foreign-made steel imports impact U.S. national security.
“There is a lot of anticipation that there is going to be a statement by the Commerce Department today or later this week that suggests Trump impose something like the 232 tariffs,” Macquarie managing director Aldo Mazzaferro told CNBC.
Impacting Steel Stocks
Citing sources speaking to Reuters, Trump is impatient with China and is looking to impose tariffs on steel imports from the Far East nation. This is impacting steel stocks in a major way.
“Supportive trade policy actions such as Section 232, could be a catalyst to change investor perception,” research analyst Jorge Beristain wrote. “We now have Buys on all Steels & Service Center names as they should benefit from stronger U.S. economic growth and rising trade protectionism.”
Beristain added steel demand in the first five months of 2017 is up 4% compared to the same time frame last year. In addition, Trump’s proposed $1 trillion infrastructure plan will likely also increase demand for steel.
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