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Highlights
- The US and UK have commenced discussions to remove tariffs placed on steel and aluminium, which had been placed during former US President Donald Trump’s administration.
- The US had imposed an import tax of 25 per cent on steel and 10 per cent on aluminium in 2018.
The US and UK commenced discussions to remove tariffs placed on steel and aluminium, which had been placed during former US President Donald Trump’s administration.
The US and UK released a joint statement saying that they were working towards an expedited deal to help with the viability of the above industries in both the countries’ markets.
The statement added that the potential deal would thereby strengthen their democratic alliance.
In 2018, the US had imposed 25 per cent import taxes for foreign steel and 10 per cent for aluminium during its dispute with the European Union (EU). The Trump administration had introduced the tariffs calling it a national security threat.
Amid this development, let us explore the investment prospects of 2 FTSE 100 index listed steel and aluminium stocks:
- Evraz PLC (LON: EVR)
Evraz is the UK-based vertically integrated steel mining and manufacturing group. It is a part of the FTSE 100 index.
The group intends to demerge its coal assets under PJSC Raspadska (RASP), which will lead to 2 public listed businesses. The demerger will aid both companies to have a higher level of transparency with relation to their sustainability goals better-aligned capital allocation and would allow RASP to follow an independent strategy and more.
The group recently held a general meeting wherein 100 per cent of its shareholders approved its demerger of coal assets plans.
The settlement date for the transfer of RASP shares to Evraz shareholders after demerger may happen around 7 April.
Image source: EODHD/Others
The group’s shares ended at GBX 567.20, up by 1.79 per cent on 19 January, while the FTSE 100 index closed at 7,589.66, up by 0.35 per cent.
The company’s market cap was at £8,127.82 million, and it has given a one-year return of 12.58 per cent as of 19 January.
- Rio Tinto PLC (LON: RIO)
Rio Tinto is an Anglo-Australian metal and mining giant and is among one of the largest aluminium producers globally.
It’s Q4 2021 aluminium production stood at 757 kt, lower by 7 per cent from Q4 2020. And its FY 2021 aluminium production stood at 3,151, down by 1 per cent from FY 2020.
The 1 per cent decline in production was due to a strike (which started in 2021) impacting capacity at the Kitimat project located in British Columbia. However, the company reached a deal with the project’s union and worked for a controlled restart this year.
The group also signed a memorandum of understanding (MoU) with Bluescope in October 2021 to explore low carbon emission methods to make steel.
Image source: EODHD/Others
The group’s shares ended at GBX 5,654.00, up by 3.88 per cent on 19 January. The company’s market cap was at £70,569.87 million as of 19 January.
