CSN seeks to negotiate a quota mechanism with the U.S. after new steel tariffs. Despite a reported net loss in Q4, the firm exceeded earnings expectations, causing a rise in its stock price. CSN’s strategy suggests possible upcoming negotiations similar to those in 2018.
Brazilian steelmaker CSN is optimistic about the possibility of negotiating a quota mechanism with the United States in the near future. Following the imposition of tariffs on steel and aluminum imports by U.S. President Trump, CSN has chosen to seek dialogue rather than retaliate against what it termed “unjustifiable” tariffs. This strategic decision positions Brazil, a significant supplier of U.S. steel, for potential negotiations ahead.
Trump’s imposition of a 25% tariff on steel and aluminum imports has sparked a reorganization of global trade. While Canada and Europe responded immediately with retaliatory measures, CSN’s commercial head, Luis Fernando Martinez, expressed confidence during an earnings call that negotiations similar to those in 2018 may resume soon, potentially resulting in a quota system. The U.S. continues to be a net importer of various steel products, including plates and sheets, generating interest in establishing quotas.
Despite reporting a net loss of 85 million reais ($14.66 million) in the fourth quarter due to high financial expenses, CSN’s core earnings surpassed analysts’ expectations. The firm announced adjusted EBITDA of 3.33 billion reais, an 8% decline from the previous year yet exceeding a forecast of 2.87 billion reais. Net revenue reached 12.03 billion reais, exceeding the analyst projection of 11.8 billion reais.
CSN’s shares increased sharply, climbing over 7.5%, while the mining division, CSN Mineracao, soared around 10%, becoming top gainers on Brazil’s Bovespa stock index, which was up by 1.3%. Analysts at JPMorgan noted that both CSN and CSN Mineracao outperformed their forecasts, leading to a positive outlook and expectations of consensus estimate revisions.
CSN aims to negotiate a quota mechanism with the U.S. following new tariffs imposed by President Trump. While CSN reported a net loss impacted by high expenses, its earnings surpassed market expectations, leading to a significant rise in share prices. The potential for future negotiations reflects CSN’s strategic approach to addressing tariff challenges and maintaining its competitive standing in the steel market.
Original Source: www.marketscreener.com
