AK Steel Holdings (NYSE:AKS): AK Steel shares are making volatile moves over the last eight months due to trade war tensions. Donald Trump believes that reducing cheap imports from China and other parts of the world could help revive the U.S. steel industry.
This is because the president started imposing tariffs on Chinese steel, aluminum, and other commodities. Trump has also imposed 25% tariff on steel from Canada, Mexico, and the European Union – which accounts for almost half of total supplies to the U.S.
Investors are worried that the trade war could hurt the U.S. industrial sales to China. It would also have a significant impact on the demand for steel and other materials used in machinery, as well as agricultural and other manufacturing activities.
AK Steel Shares are Volatile
AK Steel share price has been range-bound over the last two months as China and the European Union began their against U.S. tariffs. Its shares are currently trading around $4.58 a share, down 27% since the start of this year. AK Steel shares have the 52-week trading range of $4.00 – $7.04, with the market capitalization of $1.43 billion.
Steel Prices Are Rising
AK Steel and other U.S. based companies are enjoying higher U.S. steel prices. The majority of U.S. Steel companies, including Steel Dynamics (NASDAQ:STLD) and Nucor (NYSE:NUE), issued strong earning expectations for the second quarter. AK Steel is also likely to report solid financial numbers for the second quarter based on higher domestic steel prices.
U.S domestic steel prices rose almost 40% since Donald Trump announced tariffs on imported steel. U.S. Commerce Secretary Wilbur Ross believes higher than expected rise in steel prices is hurting the U.S. industrial, manufacturing, and infrastructure industries, blaming speculators for creating hype in steel prices.
“What has been happening is a very unsatisfactory thing,” he said, pointing to “intermediaries” who had been stockpiling steel and withholding it from the US market, “It is clearly a result of anti-social behavior by people in the industry.”
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