U.S. Steel Tariffs a Boon for Some European Producers

Date: 08 August 2018 - 21:49

News ID: ۵۶۰۸۸

LONDON (Reuters) - Washington's tariffs on steel imports have prompted warnings of an earnings hit for European producers, but for companies such as ArcelorMittal with operations in increasingly protected markets, levies are expected to yield a profit bonanza.
The United States slapped 25 percent tariffs on steel imports earlier this year, prompting such shipments to fall 7.5 percent to 18 million tonnes in the first half, with further declines expected.
The tariff move coupled with strong demand has sent U.S. hot rolled coil steel futures to decade highs around $900 (£700) a tonne, up 35 percent on the year.
This has been a boon for European steelmakers that can still sell into the United States despite the tariffs, and which since July have been protected by EU steel tariffs imposed in response to the U.S. levies.
European steelmakers are also benefiting from capacity cuts in China and robust global growth.
Despite this, investors are reticent to bid up the stocks due to concerns the global trade rift triggered by Washington's steel tariffs will be protracted, eventually damaging growth and demand.
"Trade wars are a risk, but right now steel stocks are only pricing in negatives," a Swiss-based fund manager said.