Australian steelmaker BlueScope has upgraded its July-December earnings guidance by as much as A$240mn ($169mn), driven by a wider steel spread as iron ore costs fell and finished steel prices increased.
The company has raised its underlying earnings before interest and tax (EBIT) guidance from A$860mn-960mn to "approaching" A$1.1bn. Previous guidance was based on BlueScope's US mini-mill spread at $750/t, but the steel spread is now expected to be $810/t, the company said on 26 October.
The change is primarily driven by the North American end-use market, as well as stronger than expected performance from its Australian steel products business, the company said.
The company expects July-December underlying EBIT from its US business to rise by 50pc from January-June, to A$881mn from A$587mn. Meanwhile, it projects that Australia-based earnings will nearly double to around $130mn in July-December.
Argus-assessed steel hot-rolled coil (HRC) ex-works US domestic prices rose by 55pc year on year to $1,298.75/short ton on 20 October.
By contrast, Argus-assessed portside fines 61pc Fe (PCX) seaborne equivalent fell by 15.8pc year on year to $89.2/dry metric tonne (dmt) on 23 October. Argus-assessed hard coking coal fob Australia rose by 38pc year on year to $227/t on 23 October.
The company rejected a A$15bn takeover proposal from Indiana-based Steel Dynamics and Australian conglomerate SGH in February but remains open to a higher bid.
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