Latest news with #Vassella
Yahoo
17-02-2025
- Business
- Yahoo
Aussie winner from Trump's tariff
BlueScope says it could be a major beneficiary of the 25 per cent tariff imposed by US President Donald Trump, even if China onsells its steel into Australia. During a presentation to shareholders, BlueScope steel managing director and chief executive Mark Vassella said the price of steel had jumped 20 per cent since the tariff announcement. 'The new administration has certainly turned Washington on its ear,' he said. 'Since the Trump announcement, we've seen prices go up, futures strengthen.' The steel price has soared 20 per cent since Mr Trump's announcement of plans to initiate broad tariffs on all steel and aluminium coming into the US. Mr Vassella said he was still confident the US was the best steel market in the world to invest in. He also pointed to the last time Mr Trump introduced tariffs during his first presidency in 2018, when prices for steel were lifted by the tariff amount. 'If we get a pass like we did last time that's great, my base case is prices will move up by 25 per cent,' Mr Vassella said. BlueScope has capacity to produce about three million tonnes a year of steel in the US versus exports from its Australian operations to America of 200,000 to 300,000 tonnes a year, meaning overall it could win from the move. When asked about the tariffs impact, Mr Vassella said: 'There are lots of moving parts in this piece, but the short answer is net-net a positive for BlueScope.' Mr Vassella, however, flagged the Australian government needed to still protect the local industry, as China would look for a new place to sell its steel to following the US tariffs. 'The potential risk for us is that we see material dislocated from other markets, and it comes to Australia, and it's something we're talking to the federal government about and we have been for years,' he said. In 2018, during Mr Trump's first term, he announced a 25 per cent tariff on steel and a 15 per cent tariff on aluminium, although countries including Australia, Canada and Mexico were eventually excluded from the uplift in prices. A tariff is a domestic tax levied on goods as they enter a country, with the aim of making local prices more competitive, but it has the trade-off of higher prices for consumers in the domestic market. The tariffs plan is a central part of Mr Trump's economic vision as he believes it will help protect local jobs, the broader US economy and lift tax revenues. Anthony Albanese has spoken with Mr Trump about the steel tariff, with Mr Trump later confirming that an exemption for Australia was under consideration after his conversation with the Prime Minister, whom he dubbed a 'very fine man'. 'We have a surplus with Australia, one of the few, and the reason is they buy a lot of aeroplanes,' Mr Trump said. Days later Mr Trump's senior counsellor for trade Peter Navarro told reporters: 'Australia is just killing our aluminium market' and 'what they (Australia) do is they just flood our (Aluminium) markets'. Mr Vassella said he was expecting an uplift from BlueScope's US operations, where it owns the North Star Steel mill in Ohio, after a challenging period for the business. For the six months ended December 31, BlueScope reported a sizeable profit decline, with its net profit after tax dropping by $260.2m to $179.1m. This was driven by weakness in North America where its North Star business delivered a significantly softer result compared with the prior half. However, BlueScope believes there will be a pick up in US demand for its product. The company will pay an interim dividend of 30c per share, up on the 25c paid in the prior corresponding period, on March 25 and also announced a $240m buyback extension over the next 12-months. Sign in to access your portfolio
Reuters
17-02-2025
- Business
- Reuters
Australian steelmaker BlueScope sees Trump's tariffs as a boon
SYDNEY, Feb 17 (Reuters) - BlueScope Steel ( opens new tab, Australia's largest steelmaker, will be a beneficiary of U.S. President Donald Trump's protectionist tariffs, CEO Mark Vassella said on Monday, saying that he expects higher prices to boost BlueScope's profits in North America. After BlueScope posted a better-than-expected first-half profit, Vassella said steel prices were already "moving in the right direction" following Trump's announcement of 25% tariffs on imports of steel and aluminium into the U.S., without exceptions for allies such as Australia. "If prices go up, as we saw last time, then the short answer is, Yes, we stand to benefit," he said, noting that steel prices were up 20% since Trump's tariff announcement a week ago. BlueScope operates five businesses in North America. The profit and upbeat commentary sent BlueScope stock to its highest level since August 2021, climbing 12% to A$25.03 ($15.90) in early trading, while the benchmark S&P/ASX 200 (.AXJO), opens new tab index was down 0.7%. Melbourne-based BlueScope's primary steelmaking operation in Australia is Port Kembla Steelworks near Sydney. It produces over 3 million tonnes of crude steel domestically per year, of which it exports about 300,000 tonnes to the U.S. The company's five businesses in North America include the North Star mill in Ohio, which together produce about 3 million tonnes. "It's really a 300,000 tonnes versus a 3 million tonne argument," Vassella said. Underlying demand in the U.S. for the company's steel was "pretty good"' for industries such as building and construction, automotive and manufacturing end-use, he said. Vassella said the Trump administration's previous steel tariffs drove steel prices up from $500 to $800-900 per tonne. "Being a domestic manufacturer, we will potentially benefit from any increase in price that occurred because of the tariffs and the impact they have on imported steel coming into the country," he said. North America was BlueScope's biggest revenue-generating geography in the six months to December 31, 2024, accounting for 42%, or A$309 million, of all underlying earnings before interest, tax, depreciation and amortisation. Australia made up 39% or A$288 million. BlueScope's first-half net profit dropped 59% to A$179.1 million, but still came in ahead of consensus analyst forecasts of A$170 million. The steelmaker lifted its interim dividend by 20% to 30 Australian cents per share. ($1 = 1.5738 Australian dollars)
