European steelmakers flag trade and price risks despite quarterly earnings beats
ArcelorMittal , which reported on Wednesday a smaller-than-expected drop in its quarterly core profit, flagged trade disruptions as a risk to its 2025 steel demand forecasts, particularly in the U.S. and China, sending its shares down more than 5%.
"Heightened uncertainty around the terms of global trade is hurting business confidence and risks causing further economic disruption if not quickly resolved," the CEO of the world's number two steelmaker Aditya Mittal said, echoing concerns raised by Swedish rival SSAB (SSABa.ST), opens new tab.
SSAB, which also reported a smaller-than-expected drop in earnings on Tuesday, said the proximity of its facilities to customers, and specialised products helped cushion the immediate impact of new U.S. tariffs, but warned of a "more uncertain than usual" second-quarter outlook in its steel division.
The results of Luxembourg-based steel group Aperam (APAM.AS), opens new tab also came slightly above expectations on Wednesday, which it credited to higher volumes in Europe and the contribution from the consolidation of its U.S.-based business.
Aperam, which makes stainless and speciality steels and alloys, operates mainly in the EU and Brazil, and has limited exposure to the U.S. market.
The group warned that pricing pressure would weigh further on its earnings in the second quarter, though it should improve compared to the previous three months' performance.
However, its admission that it was difficult to provide an outlook for the quarters further ahead sent its shares down in early trading.
"Reliable projections for the remainder of the year are challenging in the current volatile environment," group CEO Timoteo Di Maulo said.
According to Oddo-BHF analyst Maxime Kogge, second quarter could bring some relief with trade restrictions expected to lift prices, European players further reducing their exposure to China, and restructuring efforts paying off.
However, a mix of high energy costs, competition from cheap Chinese producers and higher tariffs on exports to the United States loom large over the European steel industry at a time when the global market already grapples with excess capacity.
"Global steel excess capacity is expected to continue rising, (...) fuelled by cross-border investments by Chinese steel companies," the Organisation for Economic Co-operation and Development said in a report earlier this month.
ArcelorMittal offered a mixed assessment of its Asian markets. It expects the strong demand trends in India to continue to play out supported by the new 12% safeguard Indian duty on steel imports, notably from China.
In China, however, the group expects low steel spreads - the margin between steel prices and production costs - to persist due to overcapacity.
Despite its cautious tone, ArcelorMittal reaffirmed its 2025 investment plans and noted a rebound in European steel spreads, supported by the European Commission's Steel and Metals Action Plan, trade barriers against imports and an expected rise in Germany's spending on infrastructure.
Other European steel companies, Finland-based Outokumpu Oyj (OUT1V.HE), opens new tab and Spain's Acerinox (ACX.MC), opens new tab are due to report their first-quarter results on May 8.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NBC News
18 minutes ago
- NBC News
Credit card startup Imprint beats big banks for Rakuten co-brand deal
There's a new player making waves in an industry dominated by big banks. Imprint, the 5-year-old credit card startup, beat out banks in a competitive bidding process for a new co-branded card from online shopping platform Rakuten, CNBC has learned. The deal is the most recent sign that Imprint is gaining traction in the co-branded credit card industry. The New York-based startup also just raised $70 million in additional capital, boosting its valuation by 50% to $900 million less than a year from its previous round, according to Imprint CEO Daragh Murphy. Credit card partnerships with retailers, airlines and hotels are some of the most hotly contested deals in finance. Brands often go through extensive bidding processes to select a card company, while the companies compete for the right to issue cards to millions of loyal customers. The industry's largest players include JPMorgan Chase, Capital One, Citigroup and Synchrony. 'We're talking to Fortune 500 companies about being their partner and them choosing us over Synchrony, over Barclays, over U.S. Bank,' Murphy said in an interview. 'We have to kind of walk and talk like we're a big, important company, even though we still have a startup ethos.' That's why the company recently raised capital, bringing its total to $330 million, most of which is held on the firm's balance sheet, according to Murphy. Those funds help show potential partners that Imprint has staying power, he said. Imprint also has about $1.5 billion in credit lines from banks including Citigroup, Truist and Mizuho, which it uses to extend loans to card customers, Murphy said. The startup is behind the cards from brands including Eddie Bauer, Brooks Brothers and Turkish Airlines. 'Banks are in trouble' To offer its credit cards, Imprint usually partners with one of two small banks, First Electronic Bank or First Bank and Trust. Imprint handles the customer experience, including the technology and credit decisions, while using the credit card rails of regulated banks. In the case of the Rakuten card, Imprint is relying on the American Express network, which allows users to get Amex purchase protections and other perks. It is using First Electronic Bank to help issue the cards. 'Though we're not a regulated bank, we're effectively building a bank,' Murphy said. 'We have to do all the same things as a bank. We're a capital markets company; we're a compliance company; we're a risk and credit and fraud company; we're a technology company.' To gain a toehold in the market for co-branded cards, which can be used anywhere credit cards are accepted, Imprint decided it would focus on a seamless digital experience for customers, Murphy said. That requires technology integration that is difficult for established players who rely on third-party companies including Fiserv to complete transactions, he said. 'The banks are in trouble because they don't own the technology that the credit card runs on,' Murphy said. 'Every credit card in your wallet, whether it's Chase … or from Citi or Synchrony, they rely on two or three different third parties to power the technology.' Fees & rewards Imprint also decided to set itself apart by making it easy for customers to pay off their loans, Murphy said. Card companies including Bread Financial and Synchrony make a far larger percentage of revenue from late fees than Imprint does, he said. 'You shouldn't have all these regressive late fees, and you shouldn't make it hard to pay,' Murphy said. 'The easier we make it to pay, the more likely you are to use the card, and the more likely you are to use the card, the better it is for everybody.' Finally, Murphy said the company's low customer acquisition costs allow it to fund more rewards for card users. The new Rakuten card, for instance, offers users an extra 4% in cash back in addition to what customers earn through shopping on the online portal, capped at $7,000 in spending per year. Users also earn 10% in cash back while dining at Rakuten's partner restaurants, and 2% cash back on groceries and non-partner restaurants. discontinued in 2022.
Daily Mirror
an hour ago
- Daily Mirror
Zharnel Hughes speaks out over unpaid Grand Slam Track prize money
Britain's fastest man Zharnel Hughes is waiting for $130,000 in prize money from Grand Slam Track, which scrapped its final meet of the season over financial struggles Zharnel Hughes has warned athletes could take a wide berth of Grand Slam Track next year after admitting he is among those still waiting for prize money. Michael Johnson's breakaway competition was billed as transformative when it kicked off in Apri l by offering track stars the potential to earn unprecedented prize money. But after its fourth fixture in LA was scrapped for financial reasons, a host of athletes are still waiting to be paid. Athletes were promised top prizes of $100,000 - with Brits Matt Hudson-Smith, in Jamaica and Philadelphia, and Josh Kerr, in Miami, landing first-place finishes. World Athletics president Sebastian Coe had admitted 'this is not a good situation' with the governing body monitoring the situation. Grand Slam have not commented but a number of agents have been given assurances that prize money will be sent by late September. And Hughes, who won $130,000 across three weekends, says he is among those left in limbo - though he has received appearance fees from the US-based league. 'We haven't got any payment yet,' Britain's fastest man said. 'My agent has been in contact with them. It's not like I'm studying what's going on but I know I've not received funds yet. 'I think the appearance fees have come through but in regards to the actual racing it hasn't come through yet. I'm just looking to see if we get paid by August or September, hopefully it's in the accounts by then. 'I think people enjoyed it but obviously now the payments have been delayed and they fell short by not having the last one people may be more hesitant to try out next season. We have to see how it goes next season.' Hughes added 'it kind of sucked' that Grand Slam did not bring one of their fixtures to the UK or Europe. Ticket sales for three events that went ahead fell well below expectations. 'Hopefully they can sort themselves out and if they do go again next season they can get some races in Europe,' Hughes said. 'You won't be worrying about having to fill up the stadiums.' Join our new WhatsApp community and receive your daily dose of Mirror Football content. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don't like our community, you can check out any time you like. If you're curious, you can read our Privacy Notice.
Reuters
an hour ago
- Reuters
US appeals court revives antitrust lawsuit over Puerto Rican baseball league
July 22 (Reuters) - Puerto Rico's top baseball league must face claims that it conspired to suppress competition in the popular sport on the island, home to many current and former stars of Major League Baseball, a federal appeals court ruled. The 1st U.S. Circuit Court of Appeals in a ruling, opens new tab on Monday revived part of a lawsuit that was filed in 2022 against the league and others by a former owner-operator of a franchise in Puerto Rico's professional baseball league, Liga de Béisbol Profesional de Puerto Rico. The Boston-based appeals court, which hears federal cases from Puerto Rico, said that former owner Thomas Axon could pursue a narrowed antitrust and civil rights lawsuit against the league and others. The appeals court upheld the dismissal of U.S. federal antitrust claims, but allowed antitrust and fair competition claims under Puerto Rican laws. In a statement, Winston & Strawn's Jeffrey Kessler, a lead attorney for the plaintiffs, welcomed the 1st Circuit's order allowing the case to proceed and said they were weighing their options over the dismissal of the federal antitrust allegations. Francisco Colón-Ramírez, a lawyer for the baseball league, did not immediately respond to a request for comment. Axon in the lawsuit said rival teams had worked to block his efforts in 2019 to restore his franchise through major new broadcast initiatives, better salaries, enhanced sponsorships and expanded merchandising. He alleged that the baseball league seized his investor-operator interest without compensation or due process, and moved to box him out of the league. The league and other defendants have denied any wrongdoing. In dismissing the lawsuit, U.S. District Judge William Young in 2023 pointed to the 'baseball exemption' of federal antitrust law. The U.S. Supreme Court in a 1922 case concluded antitrust law does not apply to the business of baseball. In the latest in a string of legal challenges involving the baseball exemption, Axon's lawyers argued it only applies to Major League Baseball and its direct affiliates, and not to the Puerto Rican league. Young disagreed. The 1st Circuit panel — Chief Judge Barron, joined by Circuit Judges O. Rogeriee Thompson and Gustavo Gelpí — suggested the exemption is out of touch with the modern realities of baseball. But the Supreme Court, the panel said, has declined so far to overrule it. The case is Cangrejeros de Santurce Baseball Club LLC et al v. Liga de Béisbol Profesional de Puerto Rico Inc et al, 1st U.S. Circuit Court of Appeals, No. 23-1589. For plaintiffs: Jeffrey Kessler of Winston & Strawn For defendants: Francisco Colón-Ramírez of Colón Ramírez Read more: National Hockey League, Canadian hockey clubs defeat US class action US judge approves NCAA baseball coaches' $49 million settlement Bipartisan state coalition backs challenge to MLB's antitrust immunity
