Steel stocks just had a nice little Christmas rally. Most steel companies saw decent upward price movement in the last few trading sessions. However, the rise in steel stocks experienced a speed bump when the US Department of Commerce announced the preliminary dumping duties on corrosion-resistant steel products. Chinese companies received anti-dumping duties in excess of 250%. Other countries received lesser duties.
According to the Department of Commerce’s preliminary enquiry, the imports of corrosion-resistant steel products from Korea would attract anti-dumping duties slightly above 3%. Indian steel companies received anti-dumping duties of ~7%. Italian steel companies had lower anti-dumping duties of 0%–3.11%. For Taiwan, the Department of Commerce didn’t make an “affirmative preliminary determination.” As a result, the imports of corrosion-resistant steel products from Taiwan wouldn’t attract any anti-dumping duties.
The lower duties on countries other than China were negative for the US steel industry. Steel stocks including U.S. Steel (X), AK Steel (AKS), Steel Dynamics (STLD), and Nucor (NUE) fell after the Department of Commerce released its preliminary findings. The above graph shows the recent price movement in steel stocks.
You can also consider the Materials Select Sector SPDR ETF (XLB) to get diversified exposure to the materials sector. Currently, metal producers form ~9% of XLB’s portfolio.
In this series, we’ll look at some of the recent steel industry indicators. These indicators should help you understand the US steel industry’s health. We’ll start by looking at the November steel imports data.