The BlueScope Steel Limited (ASX: BSL) share price has climbed 8% into the green over the past week.
BlueScope shares are now changing hands at $24.19 apiece, slightly lower from today’s open of $24.26.
What are the tailwinds behind the BlueScope Steel share price this week?
On 27 July, BlueScope released its preliminary unaudited results to the market, where it expects a record 2H result for the period of 1 January – 30 June 2021.
The steel producing behemoth has upgraded its earnings before interest and tax (EBIT) guidance from $1 billion – $1.08 billion to a new estimate of $1.19 billion for the second half.
As a result, the company expects “preliminary unaudited” underlying EBIT for FY21 to come in at approximately $1.72 billion.
BlueScope provided a breakdown of this expected outsized performance in the release.
It explained that hot-rolled coil (HRC) steel prices continue to increase in the US, “surpassing expectations” as per the company.
This came through to positively impact spreads at its North Star and North America coated businesses. The same impact is observed in its Australian and New Zealand markets.
BlueScope’s Australian steel products segment also “delivered a substantially better preliminary result”, and grew by around 60% from the first half this year.
Consequently, domestic sales volumes were the highest at this site since 2008, at over 1.3 million tonnes.
There has been no other market sensitive information released by the company of late prior to this event.
Therefore, it stands to reason that this release has been the major catalyst to drive BlueScope shares higher and reach their 52-week highs earlier today.
BlueScope Steel share price snapshot
Today’s gains cap off an extended run into the green for the BlueScope Steel share price over this year to date.
Since 1 January, BlueScope shares have posted a return of 39%, extending the previous 12 month’s gain of 108%.
Both of these returns have outpaced the S&P / ASX 200 Index (ASX: XJO)’s return of around 23% over the last year.
The post Why the BlueScope Steel (ASX:BSL) share price is up 8% in a week appeared first on The Motley Fool Australia.
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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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