Latest news with #S232
CNBC
a day ago
- Business
- CNBC
Miner Freeport-McMoRan will benefit from Trump's copper tariffs, says Morgan Stanley
Freeport-McMoRan might be positioned for meaningful gains thanks to President Donald Trump's copper tariffs, according to Morgan Stanley. The bank upgraded the mining stock to overweight from equal weight but cut its price target to $48 from $54. That updated target implies more than 14% upside from Friday's close. In late July, Trump signed an order that imposed a universal 50% tariff on copper imports , a move that should benefit Freeport-McMoRan, analyst Carlos De Alba said. That's because most of the company's North American sales are copper rod, and the U.S. is a net importer of that metal, he said. "We believe the market is not appreciating the benefits that will accrue to FCX from S232 copper tariffs," the analyst wrote in a Monday note. "We expect that FCX will be able to raise pricing in its annual copper rod contracts for 2026, which account for the majority of the company's North America sales volumes." Seeing that the U.S. is a net importer, De Alba said that Freeport-McMoRan will have the ability to increase prices for copper rod in the country. He predicted that the company will raise the all-in price of copper rod by 40% from the first quarter of 2026 to the fourth quarter of 2028. The analyst also thinks that the recent reaction in the stock price is "overdone," adding that the company will "still benefit from hefty 50% tariffs on a majority of its U.S. volumes." FCX 1M mountain FCX, 1-month Shares initially rose on July 30, the day the Trump administration announced the copper tariffs but then rolled over when the Trump administration clarified that the tariffs don't apply to "copper input materials" such as ores. The stock ultimately closed more than 9% lower in that session. It has still risen more than 11% in the past six months, outpacing the S & P 500's rise of more than 5% in that period. The stock was nearly 2% higher in the premarket following the upgrade.
Yahoo
02-06-2025
- Business
- Yahoo
Steel and Aluminum Stocks Surge After Tariff Announcement
President Trump announced Friday that steel and aluminum tariffs will double from 25% to 50%, calling the move a cornerstone of his "America First" agenda to revive U.S. manufacturing. The tariffs, set to take effect Wednesday, sparked a sharp rally in U.S. metal stocks in premarket trading as investors bet on stronger domestic production and profits. Trump visited a U.S. Steel plant near Pittsburgh at the end of last week to promote a pending partnership with Japan's Nippon Steel, describing the deal as a "planned investment" that would keep the iconic steel plant operating in the U.S. despite foreign involvement. He also revealed the increased steel tariffs at the event:By early Monday morning in premarket trading, shares of steel and aluminum companies jumped on the tariff news: : +32.8% : +14% : +5.9% : +13% Flat : Flat : Shares dropped : Shares jumpedBMO Capital Markets analyst Katja Jancic told clients that steel and aluminum tariffs led her to upgrade Nucor from market perform to outperform while downgrading Algoma to market perform from outperform — "as the company is a relative tariff loser." "Nucor is executing on a multi-year organic growth plan that should, over time, support higher through-cycle profitability and FCF," Jancic said. She set Nucor's price target to $145, implying a 33% increase from the last close. Goldman analysts Eoin Dinsmore, Aurelia Waltham, and others provided clients with the understanding that steel and aluminum tariffs increase the chances of copper tariffs: President Trump has announced that the steel and aluminium Section 232 tariffs will be doubled to 50% on June 4. In March, the S232 aluminium tariff was increased from 10% to 25% and all exemptions to the steel and aluminium tariffs were removed. Since then, the prices that U.S. steel and aluminium consumers pay have risen, with U.S. steel prices now accounting for 100% of the higher tariff[1] and the U.S. Midwest aluminium premium - the price paid on top of the LME price of physical delivery - accounting for ~85%[2] of the current 25% tariff. On the investment front, since the tariff increased, the UAE firm Emirates Global Aluminium has announced a $4bn investment in a US-based aluminium smelter with first production scheduled in 2030. No major new steel investments have been announced, but the previously announced major investments from Japan's Nippon Steel and South Korea's Hyundai are starting to progress after delays. The market expectation is that overseas companies that invest will get some form of tariff relief on current shipments to the U.S., which poses a risk to full tariff pricing. If the higher metals tariffs come into effect, and remain in place, the U.S. Midwest aluminium premium would need to rise to around 68-70c/lb from 38c/lb to keep imports flowing. The U.S. spot steel (hot rolled coil) price is now at $888/st[3], up 29% YTD (but down 10% from the March highs). While U.S. steel futures are likely to rally if the new 50% tariff comes into effect, we maintain the view that the full tariff (either the existing 25%, or announced 50%) does not need to be accounted for in spot prices (for now), due to still-high U.S. steel inventories, lacklustre demand, and a relatively low import requirement. Higher prices are also likely to weigh further on U.S. steel demand from the manufacturing sector, which we already expect to contract this year. We think the higher metals tariffs lifts the probability a copper import tariff is imposed following the ongoing S232 investigation - which we already thought was underpriced. However, any future U.S. copper investments may come with some form of duty exemption, which could undermine full duty pricing. The Dec-25 U.S. copper price was trading at a 12% ($1,135/t) premium to the London traded global benchmark on Friday, suggesting $1,235/3,605/t upside if a 25/50% tariff is delivered. We therefore reiterate our long Dec-25 COMEX-LME copper arbitrage trade recommendation. According to Morgan Stanley's trade data, the U.S. imports about 17% of its steel needs, primarily from Canada, Brazil, and Mexico. The question now is whether the countries most impacted by Trump's new metal tariffs will respond in a tit-for-tat effort. By More Top Reads From this article on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-04-2025
- Business
- Yahoo
With Nippon Deal In Trump's Court, JPMorgan Turns Cautious On US Steel
JP Morgan analyst Bill Peterson downgraded United States Steel Corporation (NYSE:X) from Overweight to Neutral and cut the price forecast from $43 to $38. The analyst cited the pending NSC deal, which seems to be 'in the hands of the Trump administration' as the reason. In recent news, Nippon Steel and United States Steel are reportedly negotiating with the Trump administration to revive their $14 billion merger by significantly boosting investments in U.S. Steel's Rust Belt facilities. Also Read: The analyst writes that, on the demand side, construction is under pressure, while tin/container demand should benefit from S232 tariffs. Meanwhile, Peterson believes that the auto sector may experience short-term demand pull-through from earlier pre-buying, with longer-term tariff risks potentially impacting demand. Regarding BRS2's ramp-up, the analyst expects upstream melt capacity to be fully online in the second half of 2025, with the entire facility reaching steady-state production by 2026. The analyst notes that last month, the company guided for the first quarter of 2025 adjusted EPS loss of 53 cents–49 cents (vs. consensus loss of 30 cents) and adjusted EBITDA of about $125 million, in line with prior outlook of $100 million – $150 million. Consequently, Peterson now estimates softer FRP shipments this year and flat next year (-0.9%/+0.4% vs. previous +0.1%/+0.0%) to account for auto tariff risks. Investors can gain exposure to the stock via VanEck Steel ETF (NYSE: SLX) and SPDR S&P Metals & Mining ETF (NYSE:XME). Price Action: United States Steel shares are up 0.65% at $41.66 at the last check Wednesday. Read Next:Photo by T. Schneide via Shutterstock Date Firm Action From To Mar 2022 Morgan Stanley Upgrades Underweight Equal-Weight Jan 2022 Wolfe Research Downgrades Peer Perform Underperform Nov 2021 Wolfe Research Initiates Coverage On Peer Perform View More Analyst Ratings for X View the Latest Analyst Ratings Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? UNITED STATES STEEL (X): Free Stock Analysis Report This article With Nippon Deal In Trump's Court, JPMorgan Turns Cautious On US Steel originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
