DOC ruling is positive for U.S. Steel Corp.
In response to complaints by domestic steelmakers, the U.S. Department of Commerce (or DOC) ruled in favor of U.S. steelmakers and imposed anti-dumping duties on imports of tubular goods from nine nations including South Korea. The ruling holds more importance because in the preliminary inquiry in February, it had rejected the plea against South Korea, which is the major exporter in this segment.
Why volatility increased in U.S. Steel Corp (X)
The ruling by U.S. DOC came on July 11. Within minutes the stock price jumped by 5% to reach an intraday high of $28. The stocks of other steelmakers like ArcelorMittal (MT), Nucor Corporation (NUE), and Reliance Steel & Aluminum (RS) also reacted positively to this announcement. As a result, holdings of the SPDR S&P Metals and Mining ETF (XME) also gained. This isn’t surprising because cheap imported steel remains a key threat to U.S. steel companies.
Why it still isn’t jubilation time for U.S. Steel Corp. investors
While the U.S. DOC has imposed anti-dumping duties on tubular steel products, there are a couple of things investors should be aware of: