Steel shares swoon as Korea steel dumping ruling seen as not enough
Apr. 12, 2017 11:20 AM ET|By: Carl Surran, SA News Editor
Steel stocks ( SLX -3.3%) are broadly and sharply lower following a Commerce Department finding that South Korean steel producers have been unfairly dumping oil country tubular goods.
The department increased duties on oil country tubular goods to a range of 2.76%-24.9% from a previous range of 4%-6.5%, but investors may have expected duties of 30%-40%.
Axiom's Gordon Johnson says steel market pundits were expecting higher taxes on Korean imports and now believe that “protectionist White House” sentiment may have been misplaced.
Johnson notes the last time South Korea was hit with Commerce duties in 2014, there was virtually no impact to actual imports and prices for oil country tubular goods tumbled following the decision.
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http://investorplace.com/2017/04/united-states-steel-corporation-x-stock-sinks-on-ore-lake-michigan-leak/#.WO5bS2nyhhE
United States Steel Corporation (NYSE: X) is among a host of steel stocks dropping Wednesday amid lower prices for iron ore, but there’s also concern amid a potentially hazardous leak from one of its facilities in Indiana, near Lake Michigan.
X stock is off by roughly 10% in Wednesday’s trade, joined by AK Steel Holding Corporation (NYSE: AKS), off 6%, and Cliffs Natural Resources Inc (NYSE: CLF), down 7%, amid a continued selloff in iron ore. The latest session saw iron ore drop 8.5% to below $70 per ton for the first time in five months.
All told, iron ore prices have dropped by more than 11% so far in April alone, and roughly 28% in 2017.
That’s cutting into the likes of X and AKS, which had gained 70% and 26% respectively heading into April, though those gains have been blunted by a multiday slump in ore prices.
Also weighing on X stock, however, is news from the U.S. Environmental Protection Agency, which said that U.S. Steel has reported a leak of wastewater that contains hexavalent chromium — a toxic compound that can cause lung cancer, as well as damage to the eyes, skin, nose and throat, at high levels — into a waterway roughly 100 yards of Lake Michigan.
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