BlueScope Steel, Australia’s largest steel producer, has emerged as a key beneficiary of U.S. President Donald Trump’s protectionist tariffs, with CEO Mark Vassella forecasting an increase in profits from higher steel prices in North America.
In an announcement following a better-than-expected first-half profit report, Vassella emphasized that the recent 25% tariffs imposed on imported steel and aluminium into the U.S. would likely lift prices, benefiting BlueScope. Steel prices have already surged by 20% since the tariff announcement, and Vassella confirmed that, much like the previous tariff cycle, the company stands to profit if prices continue to climb.
BlueScope operates five businesses in North America, including its North Star mill in Ohio, which contributes to the company’s production of around 3 million tonnes of steel annually. The company’s primary steelmaking operation is based at Port Kembla Steelworks near Sydney, which produces over 3 million tonnes of crude steel, with about 300,000 tonnes exported to the U.S.
Vassella pointed out the discrepancy in volumes, with the company’s 300,000 tonnes of steel exports to the U.S. pitted against its North American operations producing 3 million tonnes. Underlying demand for BlueScope’s steel in the U.S. remains strong, particularly in the construction, automotive, and manufacturing sectors.
BlueScope’s U.S. operations have already benefited from the previous round of tariffs, which saw steel prices rise from $500 to $800-900 per tonne. As a domestic manufacturer, BlueScope stands to gain further from rising prices, which are likely to be influenced by the tariffs restricting imported steel.
BlueScope’s North American businesses were its largest revenue generators in the six months ending December 31, 2024, contributing 42% (A$309 million) of underlying earnings before interest, tax, depreciation, and amortization (EBITDA), with Australia contributing 39% (A$288 million).
Despite a 59% drop in first-half net profit to A$179.1 million, BlueScope’s results exceeded analyst expectations, which had forecasted A$170 million. In response to the positive outlook, the company raised its interim dividend by 20%, offering 30 Australian cents per share.
This strong performance, driven by favorable pricing conditions from tariffs, helped push BlueScope’s stock price up 12%, reaching its highest level since August 2021, at A$25.03 ($15.90), while the benchmark S&P/ASX 200 index fell 0.7%.
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