Posco Shares Gain After Biden Calls for Higher Tariffs on Chinese Steel

By Kwanwoo Jun

Posco Holdings led a rally in South Korean steel stocks after President Biden called for higher tariffs on Chinese steel, seen as a potential boon to U.S. and non-Chinese steel manufacturers.

Shares of the South Korean steelmaker rose as much as 6.5% to 395,000 won ($286.10) early Thursday, on course to snap a five-session losing streak, outperforming the benchmark Kospi's 1.5% gain.

Smaller local steel stocks also rallied, with Hyundai Steel and KG Steel jumping as much as 6.0% and 8.9%, respectively.

Biden said during a visit in swing-state Pennsylvania Wednesday that he wants to more than triple a key tariff rate on Chinese steel and aluminum products to 25% from 7.5%, heralding protectionist steps against Beijing in the run-up to the U.S. presidential election. That higher levy would be in addition to a separate 25% tariff on steel and a 10% duty on aluminum imposed under the Trump administration.

The Trump administration in 2018 granted South Korea an annual duty-free steel quota of up to 2.68 million tons under a revised bilateral free trade agreement.

Seoul officials hope to renegotiate the 2018 tariff deal to boost steel exports to the U.S. after Washington recently agreed to ease Trump-era tariffs on Japanese steel.

Analysts think Posco is still under pressure from increased raw-material and labor costs, as steel demand remains sluggish globally.

The world's seventh largest steelmaker by crude steel production as of 2022 posted a net loss in the final quarter of 2023 after three consecutive profitable quarters.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

April 17, 2024 23:43 ET (03:43 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.