Asia steelmaker shares rise despite Trump salvo on trade


Reuters

UPDATE 1-Asia steelmaker shares rise despite Trump salvo on trade


(Adds analyst reaction, data on China exports)
    SYDNEY, April 21 (Reuters) - Shares of most Asian
steelmakers rose on Friday, deflecting the first salvo of a
long-anticipated anti-dumping campaign from U.S. President
Donald Trump.
    Citing concerns about national security, Trump on Thursday
launched a trade probe against China and other exporters of
cheap steel into the U.S. market, raising the possibility of new
tariffs.[nL1N1HS1FC]
    In Japan, shares in Nippon Steel <5401.T> rose 1.3 percent,
after five weeks of steady losses, partly on speculation that
any action by the U.S. would mostly target China which is easily
the world's largest producer.
    South Korean steelmaker Posco <005490.KS> followed with
gains of over 2 percent, while Taiwan'sChina Steel <2002.TW>
advanced 1.3 percent.
    "Trump is targeting China, although he says the steel import
probe has nothing to do with China," said Choi Moon-sun, a steel
analyst at Korea Investment & Securities in Seoul.
    "Only about 5 percent of South Korea's steel produce goes to
U.S., so any impact will be very limited for Posco. China will
feel the pain if there is any wider import restrictions."
    Trump won many votes in industrial states like Michigan and
Pennsylvania with a pledge to boost manufacturing and crack down
on Chinese trade practices.
    His move diverges from the Obama administration's approach
to the issue, which relied largely on filing complaints to the
World Trade Organization (WTO).
    China is the largest national steel producer and makes far
more than it consumes, selling the excess output overseas, often
undercutting domestic producers.
    Investors in most Chinese producers seemed to absorb the
news well, in part because it had been so long telegraphed.
    China's stock markets often march to their own drummer and,
despite Trump's talk of massive dumping, U.S. steel demand
really isn't that big of a deal for China.
    The Asian behemoth accounts for almost a quarter of global
steel exports, yet less than 1 percent of those exports went to
the United States last year, according to data from the U.S.
Commerce Department.
    Shares in Baotou Steel <600010.SS> were up 1 percent, while
Angang Steel <000898.SZ> added 0.3 percent and Baoshan Iron &
Steel Co <600019.SS> held steady.
    Beijing has long pledged to downsize the industry which is
plagued by oversupply from inefficient, high-polluting mills,
but has baulked at the potential loss of jobs.
    Many Chinese investors seem to favour a rationalisation in
production which would boost the price of steel as shares in
lower-cost producers rally whenever cutbacks are floated.
    "The key thing is that we don't know enough about this, and
whether the Trump administration is somehow going to reduce the
supply of steel coming out of China, because that would actually
be positive for steelmakers everywhere and would increase steel
prices," explained a director of equity cash sales at a foreign
securities house in Tokyo.
    Prices for steel and iron ore in China were indeed rallying
on Friday, after a rough few weeks when fears that production
was starting to outstrip domestic demand hammered markets.
    Inventories are swelling, adding to fears of a supply glut
later in the year. [IRONORE/] [L3N1HP1ID]
    China's crude steel output reached a record 72 million
tonnes in March as mills ramped up output.
    Its exports of steel products rose about 32 percent to 7.56
million tonnes in March from February, when they were at a
three-year low.

 (Reporting by Wayne Cole; Additional reporting by Dahee Kim,
Cynthia Kim, Nichola Saminather, Lisa Twaronite; Editing by Kim
Coghill)
 ((Wayne.Cole@thomsonreuters.com; 612 9321 8162; Reuters
Messaging: wayne.cole.thomsonreuters.com@reuters.net))

Keywords: USA TRUMP/STEEL ASIA (UPDATE 1)



This article appears in: Stocks , World Markets , Economy , Commodities
Referenced Symbols: 005490 , 2002 , 5401


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