NEW YORK (Reuters) - Shares of U.S. steel and aluminum companies were hammered on Thursday as the United States said it would exempt more countries from a tariff on metals imports that has been promoted as invigorating industry.
The S&P 1500 steel index .SPCOMSTEEL tumbled 7.4 percent, its biggest single-day percentage decline since September 2011.
The steel index fell to its lowest point since Feb. 9 and is now down 9.2 percent since Feb. 28, the day before U.S. President Donald Trump announced plans to impose 25 percent tariff on steel imports and 10 percent on aluminum imports. The duties are set to start on Friday.
U.S. Trade Representative Robert Lighthizer told a Senate committee hearing that Trump had chosen to “pause” the imposition of metals tariffs for Argentina, Australia, Brazil, Canada, Mexico South Korea and “Europe”.
“The exemptions are a path for further competitively priced steel supply, which could help to normalize U.S. pricing relative to global levels,” said Philip Gibbs, an analyst at KeyBanc Capital Markets. “There’s a growing recognition by the market that current (spot) pricing is unsustainable.”
The stocks fell on a rough day for the overall market, with the broad S&P 500 .SPX closing down 2.5 percent amid concerns of a growing trade dispute between the United States and China.
Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China.
Steel shares “are taking an extra hit because the market is getting beat down by the broader attack by the administration on China which may be impacting the global synchronized growth thesis,” Gibbs said.
Shares of Commercial Metals Co (CMC.N) were the biggest percentage decliners in the steel index, dropping 12.3 percent, after the company’s fiscal second-quarter results missed analyst estimates.
Reporting by Lewis Krauskopf; editing by Grant McCool