Korean steel shares spike after Biden calls for tripling Chinese tariff

Shares of local steelmakers jumped after U.S. President Joe Biden called for tripling the tariff on imports of Chinese steel and aluminum.

U.S. President Joe Biden calls for tripling tariffs on Chinese steel imports while speaking at the United Steelworkers headquarters in Pittsburgh, Pennsylvania, on April 17. [EPA/YONHAP]

Shares of Korean steelmakers closed bullish on Thursday following U.S. President Joe Biden's call for tripling tariffs on Chinese steel and aluminum.

Posco Steeleon, a steelmaking subsidiary of Posco, closed at 45,300 won ($33) on Thursday, a 10.8 percent jump from the previous trading day.

Posco Holdings jumped 5.12 percent to close at 390,000 won on Thursday.

Hyundai Steel rose 4.6 percent to close at 32,050 won, while KG Steel closed up 4 percent at 6,940 won.

Shares of small- and medium-sized companies spiked as well, with Histeel, a steel pipe manufacturer, closing at 3,430 won, up 18 percent from the previous trading day. It hit the daily gain ceiling of 30 percent within only 30 minutes of market opening on Thursday.

Kosdaq-listed Daedong Steel closed at 3,900 won, up 7 percent from the previous closing session.

Aluminum makers also closed higher, with Kospi-listed Sama rising 8.6 percent, while Choil Aluminum closed up 6.6 percent.

The jump comes after President Biden on Wednesday vowed to triple the tariff rate on Chinese steel and aluminum in his competition pitch to Pittsburgh, the heart of the U.S. steel industry, ahead of November’s election.

Biden proposed raising the duty to 25 percent from the current 7.5 percent, citing "fair competition with China."

"China's steel companies don't need to worry about making a profit," Biden said during his visit to the headquarters of the United Steelworkers union. "They're not competing, they're cheating, and we've seen the damage here in America."

Experts, however, say the potential tariff hike won't have that much impact on Korean companies due to China's limited presence in the U.S. market.

"The United States imported a total of $1.7 billion worth of steel and aluminum from China last year, which only accounts for 1 percent of the country's steel supply and 3.6 percent of its aluminum supply," said researcher Ok Ji-hoe from Samsung Futures.

The U.S. government also imposes an annual quota of 2 million tons of steel from Korea.

BY SARAH CHEA [chea.sarah@joongang.co.kr]