Shares of U.S. steel, aluminium companies surge pre-market (updated)

Dongkuk Holdings Co

10/02/2025 13:24

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      Metal flows due to be diverted to Asia, Europe
    

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      Tariff news boosts U.S. shares of producers
    

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      Tariffs may bring higher prices, weaker demand, analysts
say 
    

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      EU vows to react, S.Korea holds emergency meeting 
    

  
 (Updates with European and U.S. reaction)
    By Hyunjoo Jin and Tony Munroe
       Feb 10 (Reuters) - 
    Donald Trump's plan to impose new 25% 
    tariffs
     on steel and aluminium boosted share prices of U.S.
producers in pre-market trading, while shares of producers
abroad fell, with traders citing worries of disrupted flows and
a reduction in demand.  
  
    The tariffs, which Trump said would be announced on Monday
and be in addition to existing duties, sparked warnings from
Asia and Europe about the impact on prices, profitability and
volumes and broader worries that they could push up inflation
and drag on economic activity.
    Canada, Brazil, Mexico, South Korea and Vietnam are the
biggest sellers of steel into the U.S., according to American
Iron and Steel Institute data, while Canada is the dominant
supplier of imported aluminium.
    Shares of U.S. producers of the two metals jumped in
premarket trading with the biggest U.S. steelmaker Nucor  NUE.N 
surging 9.5% and Century Aluminum  CENX.O  advancing by 8.5%.
        In other countries, shares of producers dropped, with
the world's second-largest steelmaker ArcelorMittal  MT.AS  down
2.2% and South Korea's Hyundai Steel  004020.KS  losing as much
as 2.9% amid a broader decline among South Korean steelmakers.  
 
    The European Commission said on Monday it would react to
protect EU interests while the South Korean industry ministry
held an emergency meeting with steelmakers to discuss measures
to minimise the impact of potential tariffs.
    "We are concerned that the potential change would lead to
export price hikes and reduction in the 70% quota volumes," said
an official at Hyundai Steel, referring to South Korea's annual
duty-free steel quota of 70% of volumes shipped to the U.S. on
average from 2015-17, agreed during the first Trump
administration.
    The company, which supplies steel to Hyundai and Kia's car
plants in the U.S., has said previously that it was considering
building a new steel plant in the U.S. to blunt the impact of
potential Trump tariffs. 
    Chu Xinli, an analyst at China Futures, said U.S. demand
would be reduced by higher prices and slower inflows of steel,
which is used in automaking, appliances and construction. 
    "Those that are poised to flow into the U.S. will be
redirected to other countries and regions, such as the EU and
Asian countries, which will see a change in the global steel
trading pattern," Chu said.
    India's metals index  .NIFTYMET  was that country's top
sectoral decliner on Monday, down about 2.5%.
    
    DEMAND THREATENED
    The impact of the tariffs could be wide ranging.
    The tariffs would lift metals prices for U.S. industrial
customers, reflected in a 9.9% jump to the highest since July
2022 in the premium paid  AUPc2  over benchmark exchange prices
for primary aluminium in the United States.   
    "I suspect U.S. manufacturers will have to wear higher
prices as a result of these 25% tariffs. Its import reliance is
high, around 40%-45% for aluminium and 12%-15% for steel," said
Daniel Hynes, senior commodity strategist at ANZ in Sydney.
    Some aluminium that usually would move to the United States
would be redirected to Europe, which would depress physical
premiums in that region, a trader said.
        The measures would "lead to further volume diversions to
Europe, which will further increase the already existing import
pressure due to overcapacity from China and many other
countries," said Olaf Reinecke, president of the German Steel
Association and CEO of Salzgitter  SZGG.DE .
  
    Some countries were making the case for exemptions from
Trump's tariffs.
    Australia's trade minister said its steel and aluminium
exports to the U.S. create "good paying American jobs" and are
key to shared defence interests, as Canberra presses Washington
for a tariff exemption.
    Charu Chanana, chief investment strategist at Saxo in
Singapore, said slower demand could counter the potential
inflationary impact of the tariffs. 
    "The bigger concern is the uncertainty and the shift towards
a more protectionist world," she said.

 (Reporting by Hyunjoo Jin in Seoul, Amy Lv in Beijing, Tony
Munroe in Singapore, Kirsty Needham and Renju Jose in Sydney,
Asia bureaus, Tom Kaeckenhoff in Duesseldorf and Eric Onstad in
London; Editing by Muralikumar Anantharaman, Veronica Brown and
Peter Graff)
 ((tony.munroe@thomsonreuters.com))