CSN Anticipates U.S. Steel Quota Negotiations Amid Tariffs

CSN anticipates negotiations with the U.S. on steel quotas following recent tariff impositions. Despite a fourth-quarter net loss, the company reported better-than-expected core earnings and significant stock gains, indicating a positive financial outlook amidst trade uncertainties.

Brazilian steelmaker CSN has expressed optimism regarding potential negotiations with the United States on steel quotas. An executive indicated that the company hopes to engage in discussions following the recently imposed tariffs by President Donald Trump, which are perceived as “unjustifiable.” Brazil plans to seek a dialogue rather than enacting immediate retaliatory measures against these tariffs.

The imposition of a 25% duty on steel and aluminum imports commenced on March 8, as part of Trump’s strategy to reshape global trade. CSN’s commercial head, Luis Fernando Martinez, remarked that there is a possibility of initiating negotiations similar to those in 2018 within the next two months, possibly establishing a quota system. He further stated that the U.S. remains a net importer of various steel products.

In financial news, CSN reported a net loss of 85 million reais ($14.66 million) for the fourth quarter, attributing this to high financial expenses. However, its core earnings surpassed market projections, with adjusted EBITDA reaching 3.33 billion reais, which was above analysts’ expectations. Net revenue totaled 12.03 billion reais, exceeding the forecast of 11.8 billion reais.

Shares of CSN surged over 7.5% following the earnings report, while its mining division, CSN Mineracao, saw an approximate 10% increase. Both entities emerged as top performers on Brazil’s Bovespa stock index. Analysts at JPMorgan have noted that CSN and CSN Mineracao’s performance exceeded their forecasts, leading to anticipated upward revisions in consensus estimates.

CSN is optimistic about negotiating a quota mechanism with the U.S. in response to newly imposed tariffs on steel and aluminum. Financially, despite a net loss in the fourth quarter, the company outperformed earnings expectations, contributing to significant gains in its stock. Overall, CSN’s performance reflects a robust outlook in the context of changing trade dynamics.

Original Source: www.marketscreener.com