The entrance of the BlueScope Port Kembla Steelworks is pictured, in Wollongong, Australia, February 9, 2024. REUTERS
SYDNEY, Feb 17 (Reuters) – BlueScope Steel, 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), 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)
Reporting by Christine Chen in Sydney; Editing by Leslie Adler
