CSN anticipates the opportunity to negotiate a quota mechanism with the U.S. regarding steel imports after tariffs were imposed by President Trump. Despite recording a net loss, CSN’s earnings exceeded market expectations, prompting a rise in their stock prices. Overall, the company is exploring avenues for dialogue to navigate the tariffs effectively.
Brazilian steelmaker Companhia Siderúrgica Nacional (CSN) believes there is potential for negotiations on a quota mechanism with the United States in the near future. This outlook follows the implementation of tariffs on steel and aluminum imports by U.S. President Donald Trump, which the company considers “unjustifiable.” Brazil intends to engage in dialogue with the U.S. government instead of immediately retaliating.
Luis Fernando Martinez, CSN’s commercial head, expressed optimism regarding negotiations akin to those in 2018, stating, “From what we’ve been hearing, I believe that in the next two months it is possible for a negotiation like the one we had in 2018 to be opened. Perhaps a quota system.” Martinez highlighted that the United States remains a net importer of certain steel products, suggesting that quotas could serve as a beneficial mechanism.
In its recent financial results, CSN reported a fourth-quarter net loss of 85 million reais ($14.66 million) due to high financial expenses; however, core earnings surpassed market expectations. The company achieved adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of 3.33 billion reais, down 8% from the previous year but exceeding forecasts of 2.87 billion reais.
CSN’s net revenue reached 12.03 billion reais, surpassing analyst predictions of 11.8 billion reais. In the aftermath of the earnings report, CSN’s shares increased by more than 7.5%, while its mining division, CSN Mineracao, experienced a rise of approximately 10%. Analysts at JPMorgan noted that CSN exceeded their quarterly projections due to better-than-anticipated costs, anticipating an upward revision of consensus estimates.
In summary, CSN is strategically positioned to negotiate a steel quota system with the United States following the introduction of tariffs by President Trump. Despite facing financial setbacks, the company reported better-than-expected earnings and estimates, demonstrating resilience in the current market. The projected dialogue aims to navigate trade relations beneficially for Brazil, highlighting the country’s significant role in the U.S. steel import landscape.
Original Source: www.marketscreener.com
