US aluminium, steel prices jump, shares drop on Trump's new tariffs
LONDON/SEOUL/SINGAPORE (Reuters) US prices of steel and aluminium spiked on Monday while shares of foreign steelmakers slumped after US President Donald Trump said he would double tariffs on imports of the two metals to 50%. Trump announced on Friday the new steel and aluminium levies, which take effect on June 4, intensifying a global trade war. The US is the world's largest steel importer, excluding the European Union, with a total of 26.2 million tons of steel imported in 2024, according to the Department of Commerce.While some industry experts questioned whether the tariffs will be implemented as stated, in light of Trump's earlier reversals, they said uncertainty and climbing prices of the metals would dampen industrial activity."Higher prices are also likely to weigh further on US steel demand from the manufacturing sector, which we already expect to contract this year," said analyst Eoin Dinsmore at Goldman Sachs.The premium for consumers buying aluminium on the physical market in the United States
jumped 54% while US hot rolled coil steel climbed by 5%.Germany's second-biggest steelmaker Salzgitter warned that Washington's tariff policy was dealing a severe blow to European industry.The United States accounted for around a fifth of European steel exports outside of the EU, according to Germany's steel association.Analysts were sceptical about whether the full force of the tariffs as announced on Friday would come into play.Meanwhile, the tariff shift was applauded by US aluminium producers, who said the move would stop a "flood" of imports."For decades, subsidized foreign producers have hollowed out domestic aluminum manufacturing," said Mark Duffy, president of the American Primary Aluminum Association.Shares of US steelmakers climbed in premarket trade, with Nucor, Cleveland-Cliffs and Steel Dynamics surging between 14% and 26%.
ASIAN STEEL SHARES SLIDE Shares of steelmakers eroded in South Korea, which was the fourth-biggest exporter of steel to the United States last year, behind Canada, Mexico and Brazil, according to American Iron and Steel Institute data.South Korea's Industry Ministry said in a statement that it had held an emergency meeting with officials from the country's major steelmakers, including POSCO and Hyundai Steel . Shares of South Korean steelmakers POSCO and Hyundai Steel fell 3% and SeAH Steel Corp tumbled 8%.In Vietnam, steel companies Hoa Sen Group, Nam Kim Steel and Vietnam Steel Corp skidded from 2.7% to 3.4%.The 50% tariffs will add to the challenges facing Korean steel exporters, which have refrained from sharply boosting exports to the US to avoid Washington's scrutiny, despite rising US steel prices, an industry executive told Reuters.Steel and aluminium tariffs were among the earliest Trump imposed when he returned to office in January. The tariffs of 25% on most steel and aluminium imported to the US went into effect on March 12.
TRADE TALKS South Korea, a major US ally, has called for an exemption from tariffs on steel, autos and others items, during talks with the United States. Seoul agreed in late April to craft a trade package by the end of the 90-day pause on Trump's reciprocal tariffs in July, but it has been difficult for negotiators to make big decisions due to a political leadership vacuum ahead of elections on Tuesday.In late March, Hyundai Steel announced a plan to build a $5.8 billion factory in Louisiana in response to US tariffs, but the factory will not open until 2029. In April, Hyundai Steel's bigger rival POSCO signed a preliminary deal to make an equity investment in the factory project.In India, which relies heavily on the US for aluminium exports, industry experts also warned of a major hit."This is going to have a detrimental impact," BK Bhatia, director-general at the Federation of Indian Mineral Industries, the country's leading mining body, told Reuters.
"The US is the biggest market for Indian aluminium. Government has been negotiating so we are hopeful that with talks, the tariffs will come down."
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
an hour ago
- Zawya
White House set to unveil closely watched crypto policy report
A cryptocurrency working group formed by President Donald Trump is set to release a report on Wednesday that is expected to outline the administration's stances on tokenization and market-defining crypto legislation, among other issues critically important to the digital asset industry. Shortly after taking office in January, Trump ordered the creation of a crypto working group tasked with proposing new regulations, making good on his campaign promise to overhaul U.S. crypto policy. Wednesday's report is a culmination of the task force's work so far and its first public findings. In line with Trump's January executive order, it will lay out what rules and laws should be enacted to advance the policy goals of the pro-crypto White House. Those include making sure that the Securities and Exchange Commission has a framework in place for firms to offer blockchain-based stocks and bonds, according to one person familiar with the discussions. The report is also expected to discuss the administration's wish list for legislation Congress is currently debating to create broad regulatory guidelines for cryptocurrency, according to a second person familiar with the report. The working group led by Trump official Bo Hines is composed of several administration officials including Treasury Secretary Scott Bessent, SEC Chair Paul Atkins and Director of the Office of Management and Budget Russell Vought. The White House, Treasury Department and the SEC did not immediately respond to requests for comment on the report. "While there have been regulatory regimes in place that have maybe been piecemeal or have allowed the industry to grow in certain ways, the recommendations that we expect to see in the report will be a good roadmap for how to build out crypto as a continued important part of the economy going forward," said Rebecca Rettig, chief legal officer at crypto firm Jito Labs. On the campaign trail, Trump courted crypto cash by pledging to be a "crypto president" and promote the adoption of digital assets. That is in stark contrast to former President Joe Biden's regulators which, in a bid to protect Americans from fraud and money laundering, cracked down on the industry. The Biden administration sued exchanges Coinbase, Binance and dozens more, alleging they were flouting U.S. laws. Trump's SEC has since dropped those cases. TOKENIZATION, STABLECOINS, MARKET STRUCTURE Industry participants will be looking closely at what the report says about tokenization, the process of turning financial assets - such as bank deposits, stocks, bonds, funds and even real estate - into crypto assets. Crypto firms and others have been increasingly discussing the prospect of tokenizing securities as a new way to facilitate trading. Coinbase recently told Reuters it was seeking a U.S. green light from the SEC to offer blockchain-based stocks. The SEC has yet to weigh in publicly on that request. Wednesday's report is expected to recognize the need for the SEC to develop a framework for tokenization, according to a source familiar with the discussions, but the details of the language were not immediately clear. The report will also lay out what the White House would like to see from market structure legislation working its way through Congress, according to a separate person with knowledge of the report. The House of Representatives passed a bill called the Clarity Act earlier this month that would create a formal regulatory regime for crypto, and the U.S. Senate is considering its own version of the measure. Earlier this month, Trump signed into law a bill to create federal rules for stablecoins, a type of cryptocurrency pegged to the U.S. dollar. That move was hailed as a major win for the digital asset industry, and the White House has said it wants Congress to pass market structure legislation next, which would have far wider repercussions for the industry. The crypto sector has for years argued that existing U.S. regulations are inappropriate for cryptocurrencies and has called for Congress and regulators to write new ones that clarify when a crypto token is a security, commodity or falls into another category, like stablecoins. The president's support for the crypto industry has sparked conflict-of-interest concerns, which at times have threatened to derail congressional crypto legislation. Trump's family has launched cryptocurrency meme coins, and the president also holds a stake in World Liberty Financial, a crypto platform. The White House has denied that any conflicts of interest are present. (Reporting by Hannah Lang in New York; Editing by Pete Schroeder and Matthew Lewis)
Gulf Today
an hour ago
- Gulf Today
US-EU trade deal leaves European countries unhappy
United States President Donald Trump in his vacuous hyperbole has called the US-European Union (EU) trade deal as 'the biggest deal ever made'. But for many European countries it was the best deal in a bad situation. German Chancellor Friedrich Merz said, 'This agreement has succeeded in averting a trade conflict that would have hit the export-orientated German economy very hard.' EU Trade Commissioner Maros Sefcovich told journalists, 'This is clearly the best deal we could get under very difficult circumstances.' He said that the 30 per cent tariff that Trump had threatened would have been 'much, much worse'. The deal now provides for 15 per cent tariff on all EU exports to the US, apart from buying $750 billion worth of energy, including oil, gas and nuclear from the US over the next three years. Experts say that the US will have a challenge producing so much of energy resources to sell to Europe. The EU has also pledged $600 billion in European investments in the US, a little higher than the $550 billion Japanese investments in the US. The difference is that while Japan will use the state-controlled banks to channel the flow of funds to the US, the EU has said this figure is based on the intention expressed by the European private companies. France has criticized the deal. French Prime Minister Francois Bayrou wrote on X, 'It is a dark day when an alliance of free peoples, brought together to affirm their common values and to defend their common interests, resigns itself to submission.' Sweden said it was the 'least bad alternative' and Spain said it was backing the agreement but 'without enthusiasm.' Wolfgang Grobe Entrup, head of the German Chemical Industry Association said, 'Those who expect a hurricane are grateful for a storm.' The US-EU trade agreement is one that has been clinched under duress by the Americans. But it is not going to be an easy agreement to implement. The EU wants to buy energy from the US. The question is whether the US has the capacity to produce enough energy to meet the demands of the EU. It seems that the US will find it difficult to sell energy to Europe to the tune of $750 billion. This is just one part of the problem. Europe will bear a heavy burden even though the US tariffs are now at 15 per cent. Before the deal, the tariff was at 2.5 per cent, which was very, very low indeed. A fair deal would have been where the rise in tariff would have been gradual, starting from 5 per cent and going up to 7.5 per cent because then it would not have hurt the business costs for Europe as well as for the American businesses and consumers buying European goods and services. Trump's shock treatment would harm the Americans as much as the Europeans. Will the Europeans keep up the present volumes of exports to the US at the present levels – $605.8 billion in 2024 – because the 15 per cent tariff will impact the exports on both the American and European ends? European companies will have to factor in the 15 per cent tariff into the price, and the American consumer will have to pay so much more. The US exports to Europe are far less at $370.2 billion in 2024 and the trade deficit is $235.6 billion. Will these figures change because of the deal? Will US exports to Europe increase, though European exports to the US are likely to fall? And the US may not be able to cover up the trade deficit. It is not a punitive deal, and it will not benefit the US.
Zawya
2 hours ago
- Zawya
Egypt: SCZone explores investment opportunities in ports, industrial zones with Singapore
Arab Finance: Waleid Gamal El-Dien, Chairman of the General Authority of the Suez Canal Economic Zone (SCZone), and Dominic Goh, Singapore's Ambassador to Egypt, explored investment opportunities in industrial and logistics zones or seaports affiliated with the authority, according to a statement. The SCZone offers numerous investment opportunities in line with its strategic vision that covers 21 diverse industrial and logistics sectors, Gamal El-Dien noted. He also affirmed that integration between ports and industrial zones represents a link between production and manufacturing operations. This targets global markets, given the authority's six ports on the Mediterranean and Red Seas. The chairman also rolled out plans to cooperate with Singaporean institutions and companies in a number of key sectors. Meanwhile, coordination with the Singapore Cooperation Agency (SCE) is underway to transfer Singapore's expertise in port management and operations using the latest smart port management systems. Gamal El-Dien stressed the importance of this cooperation to support the digital transformation strategy for ports, which contributes to enhancing governance indicators and increasing operational efficiency.
