BSL Stock: BlueScope Steel’s recent profit downgrade aligns with global trends, according to RBC Capital Markets analyst Owen Birrell. Amid a challenging steel market, Birrell views the downgrade as unsurprising and remains positive on BlueScope’s long-term productivity measures.

“With offshore peers facing similar trading pressures in Asia and North America, it’s not unexpected to see BlueScope lower its first-half 2025 (1H25) guidance,” Birrell wrote in a circulated note. The seaborne steel market, strained by high levels of Chinese exports over the past year, has maintained a state of oversupply. This has led to downward pressure on steel prices and intensified competition for regional steel producers.

In Australia, however, BlueScope’s exposure to currency fluctuations has provided some relief. The lower Australian dollar has supported high import parity prices, protecting BlueScope’s domestic business. Yet, Birrell cautions that if the Australian dollar strengthens, BlueScope may lose these advantages.

Despite the short-term financial pressures, Birrell highlighted BlueScope’s focus on productivity and cost-reduction, including a $200 million target aimed at securing break-even operations at Port Kembla during low-price cycles. This productivity drive, according to Birrell, positions BlueScope to capitalize on any future market recovery.

Birrell has maintained an “outperform” rating for BlueScope, seeing its self-help initiatives as vital for navigating the current global steel market and building resilience in its Australian operations.

As global steel market conditions remain difficult, analysts are watching closely, with Birrell suggesting BlueScope’s long-term strategy may benefit investors looking beyond immediate pressures.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor or conduct your own research before making investment decisions.