U.S. steel stocks rose on Thursday following news President Donald Trump will sign a directive asking for a speedy probe into whether imports of foreign-made steel are a national security risk.
Trump was expected to meet with leaders of U.S. steel companies and to sign the memorandum related to section 232 of the Trade Expansion Act of 1962 at a White House event this afternoon.
Commerce Secretary Wilbur Ross said on Thursday an investigation he launched will determine whether Chinese and other foreign-made steel is a threat to national security.
Ross said China has increased its steel exports to the United States despite promises to reduce them and that it now commands 26 percent of the U.S. market.
Shares of AK Steel were up 5.3 percent while shares of U.S. Steel were up 4.7 percent. The S&P 1500 steel index was up 2.9 percent.
Shares of Steel Dynamics, which reported results late Wednesday, were up 4.2 percent, while Nucor, which reported early Thursday, was up 2 percent.
The law allows the president to impose restrictions on imports for reasons of national security.
The last time the U.S. statute was used was to restrict imported oil, while former President George W. Bush attempted to slap tariffs on steel imports in 2002 under a different means, according to a research note from Height Securities.
"Making the case that steel imports threaten national security may be a... high legal hurdle, although we suspect the Trump administration will argue the potential loss of domestic steel manufacturing capacity could hinder the ability to respond to urgent defense needs," the Height note said.
U.S. steel shares shot up after the Nov. 8 election amid optimism of increased infrastructure spending.