After Trump's Announcement Of Steel, Aluminum Tariffs, The Sell-Side Reacts

President Donald Trump unveiled plans for steel and aluminum tariffs Thursday, and several Wall Street analysts weighed in on what the tariffs could mean for the market. 

Voices From The Street

• The tariffs are good news for steel and aluminum stocks, while the exemptions will ease broader market fears, Cowen analyst Novid Rassouli said in a note. “We think that the steel group could see material upside given that spot steel prices will move higher, in our view, and the stocks are trading at a discount to current spot prices,” Rassouli said. Cowen has Outperform ratings on Steel Dynamics, Inc. STLD and Timkensteel Corp TMST.
• JPMorgan analyst Michael Gambardella said he is doubling down on his bullish call for steel stocks. “Following yesterday’s announcement from President Trump, we continue to believe that the 232 case and the tone that has been set by the administration on steel imports will help to create a much more constructive environment for domestic steel prices by improving the supply situation in the U.S.,” the analyst said. JPMorgan has upgraded Commercial Metals Company CMC from Neutral to Overweight and maintains an Overweight rating on United States Steel Corporation X.
• Height Capital Markets analyst Clayton Allen said AK Steel Holding Corporation AKS, U.S. Steel, Century Aluminum Co CENX and Alcoa Corp AA face negative market sentiment following exemptions for Mexico and Canada. “Expectations from the steel and aluminum industries were high headed into yesterday's announcement, and Trump's late-stage decision to offer specific exemptions to both Canada and Mexico and possible exemptions to other allies meant the final tariffs failed to meet them,” Allen said. Mexico and Canada are two of the five largest U.S. steel importers flooding the market with supply, he said. 

Price Action

Here’s how key aluminum and steel stocks traded following the tariff announcement Thursday:

• AK Steel is down 8.2 percent.
• Alcoa is down 1.1 percent.
• Century Aluminum is down 9.4 percent.
• U.S. Steel is down 6.8 percent.
• Commercial Metals is down 2.8 percent.
• TimkenSteel is down 1.3 percent.
• Steel Dynamics is down 3.4 percent.

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