US steel prices could extend their recent rally if new trade regulations are implemented on steel imports into the US. Last year, American steel companies’ share values experienced their biggest climb in over a decade on rising steel prices after numerous successful trade cases resulted in the levy of tariffs on many steel imports.
The rally in US steel gained extra impetus after Donald Trump was elected as the President of the United States. Trump’s campaign promises to develop infrastructure and require the use of American made materials boosted demand expectations for American steel. While his push to force the use of American sourced materials has met some challenges, he is moving forward with cracking down on unfair trading, and that could propel steel prices even higher.
On Thursday, Trump was expected to order a Commerce Department probe of steel imports. Trump will sign a memorandum authorizing a probe under section 232 of the Trade Expansion Act of whether steel imports hinder national security, according to the White House schedule.
At the same time that Trump is pushing more trade protection, U.S. Steel Corp wants its claims that rival Chinese manufacturers colluded to fix prices to undercut competitors in the American market to be heard, and has filed a case under a statute covering unfair trade practices. An unprecedented move, if approved the United States International Trade Commission could block carbon and alloy steel produced in China from entering the US. This would be a very positive development for US steel prices. The Commission is scheduled to hold a hearing on whether U.S. Steel can pursue this case. But, there are questions whether the Commission could have jurisdiction in such a case, according to Bloomberg.