U.S. Steel Prices on Knife’s Edge as Tariff Deadline Nears | WSJ

U.S. steel prices won’t stop breaking away from those in Asia and Europe, in a rally driven by confusion about what Washington’s import tariffs will look like.

The rise in U.S. prices has come ahead of the June 1 deadline for many major exporting countries to negotiate deals that would at least partially exempt them from the Trump administration’s decision to impose steel import tariffs of 25%.

The price of American steel has now risen to its highest since a China-led demand boom a decade ago—it has surged nearly 40% this year. This week, the benchmark U.S. Midwest price for hot-rolled coil broke above $890 a short ton for the first time since October 2008. It is now almost 50% above equivalent benchmarks in Europe and China, according to S&P Global Platts data.

Traders are now wary of another sharp move in prices—in either direction. The end of temporary tariff exemptions next week could spark another surge in U.S. prices, analysts say. Conversely, leaving the door open to tariff-free imports by way of quotas or permanent exemptions for some countries may trigger a dive.

“U.S. prices are fantastically high” and without continued trade fears “the U.S. steel price premium is clearly in dangerous territory,” said Jefferies analyst Seth Rosenfeld.

Trade tensions aside, several factors favor higher global steel prices. In the U.S., demand for steel from the growing oil and gas sector, as well as auto manufacturers, has been resilient.

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U.S. Steel Prices on Knife’s Edge as Tariff Deadline Nears – MoneyBeat – WSJ.