Steel and aluminum stocks surged in premarket trading on Monday after President Donald Trump said he will impose 25% duties on all imports of the metals into the U.S..
Cleveland-Cliffs surged about 8%, Nucor jumped more than 7%, Alcoa Corp. was trading nearly 4% higher and U.S. Steel rose more than 3%.
“Any steel coming into the United States is going to have a 25% tariff,” Trump told reporters on Air Force One on Sunday. The president said he will also slap 25% tariffs on aluminum imports.
The U.S. relies on imports for more than 80% of its aluminum needs, according to a note from JP Morgan. Canada supplies about 70% of raw aluminum to the U.S., according to the investment bank.
The aluminum tariff would add nearly 30 cents per pound to prices, not including transportation and other costs, according to JP Morgan. The bank expects domestic production of aluminum to increase as a result of the tariffs.
“Although existing stockpiles may provide a short-term buffer, the medium-term outlook suggests a modestly bearish impact on aluminum prices, due to potential declines in U.S. demand and a possible increase in domestic supply,” JP Morgan analysts led by Dominic O’Kane told clients.