NEW YORK: Shares of US steelmakers jumped on Friday after Japan’s Kobe Steel Ltd said the firm’s data cheating may have spread beyond the country to affect about 500 companies, sparking global supply chain concerns.
Shares of AK Steel Holding Corp, US Steel Corp , Nucor Corp, Steel Dynamics Inc were up 2% to 6% in morning trading.
“The Kobe Steel crisis is definitely helping other steel producers,” Wunderlich Securities chief market strategist Art Hogan said.
“If you think of any other competitive industry in the commodity business, if one of the major players were knocked out it’s looked at as potential for supply disruption which benefits the other players,” Hogan added.
The scale of the misconduct at Japan’s third-largest steelmaker weakened its shares by 9%, wiping about US$1.8bil off its market value this week.
The firm’s chief executive Hiroya Kawasaki was ordered by the government to report on how the misconduct occurred and address safety concerns.
Additionally, Chinese finished steel exports in September dropped 42% year-over-year representing the lowest level since February 2014, KeyBanc Capital Markets analyst Philip Gibbs wrote in a note.
Gibbs viewed declining Chinese steel export momentum as encouraging for global supply-side dynamics.
Brazilian steemakers, including Usiminas and CSN , rose more than 5%.- Reuters
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