FXPO, IRON, BHP: Stocks to eye as pressure grows to extend steel import quotas

Highlights

• The UK steel industry and the Labour urged the UK government to extend metal import limits brought in after Brexit.
• To protect domestic industries from overseas steel manufacturers, the EU imposed 25% tariffs in 2018 on imports above a set quota.

The UK steel industry and Labour urged the Boris Johnson government to extend metal import limits brought in after Brexit. Various producers have said that they can lose up to £150 million in annual sales if the UK government ignores their requests and fail to keep the steel safeguards.

©2022 Kalkine Media®

In recent months, global steel prices were driven by the Russia-Ukraine war, the pandemic and various other factors, after going through an incredibly challenging period in recent years. However, UK steel producers have reported that removing limits before the EU would put them in a disadvantageous position as compared to their European competitors, who are already benefitting from relatively lower energy costs.

To protect domestic industries from a glut of steel manufacturers, the EU imposed 25% tariffs in 2018 on imports above a set quota, after the US government had imposed tariffs on non-US steel producers. If the UK government fails to extend import limits, the steel imports would be at risk resulting in damage to steel producers and placing jobs and investments at threat.

Amid the challenges, let’s look at 3 FTSE-listed steel stocks.

Ferrexpo Plc (LON: FXPO)

With a market cap of £874.11 million as of 15 June 2022, the share of the FTSE 250-listed commodity trading and mining company was trading at GBX 156.10, up by 5.12% at around 9:20 AM (GMT+1) on 15 June 2022. At the end of May 2022, the company produced 4.4 million tonnes of iron ore pellets, which is 8% below the same point last year. Its board has declared an interim dividend of 13.2 US cents per ordinary share. Ferrexpo Plc has given its shareholders a negative return of 65.62% over the last one year, while its year-to-date return stands at -47.80%.

Related Read: HSBA, NWG, LLOY: Should you invest in these FTSE-listed banks now?

Ironveld Plc (LON: IRON)

The shares of the iron ore company, Ironveld Plc, were trading at GBX 0.71, at 09:20 AM (GMT+1), on 15 June 2022. The company is engaged in the mining, exploration, processing and smelting of Vanadium and Titanium Magnetite in South Africa. It has given its shareholders a negative return of 21.35% over the last one year, while its year-to-date return stands at -20.72%. The FTSE AIM All-Share listed company’s market cap stands at £9.40 million as of 15 June 2022.

Related Read: NWG, OSB, MAB1: Should you consider these mortgage-related stocks?

BHP Group Plc (LON: BHP)

With a market cap of £52,770.11 million as of 15 June 2022, the shares of the Main Market-listed resource company were trading at GBX 2,502.50, up by 0.20%, at around 9:20 AM (GMT+1) on 15 June 2022. BHP Group Plc has given its shareholders a return of 30.57% over the last one year, while its year-to-date return stands at 27.75%.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.