- U.S. Steel (NYSE:X) -2.2%, AK Steel (NYSE:AKS) -1.8% and Cleveland-Cliffs (NYSE:CLF) -1.9% premarket as Credit Suisse (SIX:CSGN) comes out with cautious comments about American steel companies (NYSEARCA:SLX).
- While the market consensus is that Section 232 will be a purely positive catalyst for domestic steel makers, Credit Suisse cautions that the situation likely will prove far more complex because other countries likely will retaliate and export markets could become logjammed with steel, thus the 232 outcome may not be desirable in the medium term.
- The firm notes "the similar S201 action (30% tariffs) taken in March 2002 which had a positive market reaction in the very short term, but ultimately led to domestic U.S. pricing underperforming global pricing and U.S. equities to in fact underperform in H2 2002."
- Credit Suisse recalls that American steel equities were cut nearly in half 12 months after S201 implementation.
- Now read: Cleveland-Cliffs: Price Target Exceeded And Upcoming Conference Call
Original article