United States Steel Corporation X 8.08% shares jumped 7 percent in Wednesday’s pre-market session after the company reported a big earnings and guidance beat. While the company’s core business seems to be firing on all cylinders at the moment, comments from President Trump on U.S. steel imports could derail the rally.
President Trump is considering utilizing his Section 232 powers to limit steel imports on the grounds of national security. Since Trump opened up an investigation into steel imports earlier this year, steel traders have been optimistic that domestic steel prices could get a major shot in the arm.
However, this week, Trump said steel imports aren’t a top priority of his administration and a final decision on the issue may have to wait until other items on his agenda, such as healthcare and tax reform, have been settled.
“Trading upside could be limited following the president’s latest comments on steel trade policy—and the extended deadline,” Longbow Research analyst Chris Olin wrote on Wednesday.
For now, at least, traders seem to be more focused on U.S. Steel’s exceptional quarter.
According to Olin, U.S. Steel’s revised 2017 Tubular Segment EBIT loss forecast of -$105 million suggests “break-even potential” in the fourth quarter.
Company management said the ongoing asset revitalization plan will generate up to $300 million in annual costs savings by 2020.
In addition, EBITDA improved…
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