Stock prices for 11 US-based steelmakers and processors continued their across-the-board, double-digit rally on the New York Stock Exchange early Wednesday afternoon after President-elect Donald Trump's stunning overnight victory.
"The Trump presidency will be good for all of American industry and specifically will be good for steel in several ways," Wilbur Ross, chairman and chief strategy officer at WL Ross and Co., told S&P Global Platts in an email.
Ross, the billionaire investor and Trump surrogate -- who in the early 2000s created Ohio-based International Steel Group from the ashes of Bethlehem Steel, LTV Steel, Acme Steel, Weirton Steel and other reconstituted steelmaking plants -- is also said to be a possible candidate for secretary of commerce in a Trump administration.
The 78-year-old Ross sold ISG to Mittal Steel in 2005.
Ross told Platts that President-elect Trump's "fiscal policy will be stimulative," and that "he will be more aggressive in imposing countervailing tariffs and enforcing and modifying existing fee trade agreements."
A third element, "He does have a plan for adding another tool to the financing of infrastructure, namely tax credits for equity investors in infrastructure and repaying them to the Treasury with the income taxes on wages and contractor profits of the firm's performing the infrastructure construction," Ross said, adding, "Fourth he will foster the repatriation of corporate funds blocked overseas and this will lead to more investment in plant and equipment."
Ross emphasized, "All of these measures will help steel," and judging from the day-after price/share performance, the sector senses that.
BIG RALLY IN STEEL EQUITIES
Stock prices for the eleven companies were up an average of nearly 12% at 12:25 pm EST on the New York Stock Exchange -- far outpacing less than 1% gains by the S&P 500, the Dow 30 and Nasdaq.
Integrated steelmakers US Steel, AK Steel and ArcelorMittal stock prices were up 17.7%, 12.9% and 9.6%, respectively. Mini-mills Nucor, Steel Dynamics, Commercial Metals and Schnitzer Steel were up 12.5%, 9.6%, 17.1% and 6.7%, respectively.
Downstream big steel service centers and processors also gained. Olympic Steel, up 13.9%; Reliance Steel & Aluminum, up 9.9%, and Worthington Industries +4.8%.
Iron miner Cliffs Natural Resources' stock jumped 13% higher.
Trump campaigned heavily in steelmaking states like Ohio, Indiana, Michigan and Pennsylvania, promising trade efforts to protect the steel sector from illegal and subsidized imports.
Trump also said in late October that he would create an "American Desk" within the US Department of Commerce to manage trade matters.
As for the Department of Commerce, Politico.com was reporting Wednesday morning that Ross, and Dan DiMicco, former Nucor CEO could "fit the bill" as secretary of commerce.
In his remarks to Platts, Ross did not address the Commerce Department speculation. DiMicco was contacted, but was traveling and unavailable to comment.
STEEL ISSUES SEE 'UNPRECEDENTED' ATTENTION
"Steel issues received an unprecedented level of attention during this election season," Philip Bell, president of the Washington-based Steel Manufacturers Association said early Wednesday.
"The SMA has a long-standing tradition of operating in a bipartisan manner," Bell said in a statement. "We are pleased that this contentious election season is now behind us. We look forward to working with both the new Administration and the newly elected 115th Congress to advance policies that support the health and vitality of the U.S. steel industry."
Bell noted that the SMA was pleased to see many Congressional Steel Caucus members win reelection. "[Ohio} Senator Rob Portman has been a champion for our industry, and he persevered through a challenging race," Bell said.
Among SMA's top priorities going into 2017 will be strengthening participation in the Steel Caucus and educating new policymakers and staff on SMA's priorities.
