BlueScope (ASX:BSL) upgrades guidance on strong steel prices

BlueScope Steel (ASX:BSL) has increased its earnings guidance for the second half of the 2022 financial year thanks to strong steel prices and spreads in the US despite a softer Aussie chain. 

The steel producer now expects underlying earnings before interest and tax to be between $1.375 billion to $1.475 billion, versus the prior guidance range of between $1.2 billion to $1.35 billion.

BlueScope said the stronger outlook was driven by improved earnings expectations for North Star and the North America coated business, due to better than expected steel prices and spreads in the US. 

On another note, BlueScope warned that its Australian steel products have seen softer than expected domestic dispatch levels, due to a range of supply chain disruptions including recent east coast flood events, rail outages and pandemic-related impacts.

However, this was offset by stronger realised steel spreads combined with better than expected contributions from the downstream businesses.

Throughout recent macroeconomic and geopolitical volatility, BlueScope has continued to demonstrate strength and resilience in its business performance,” said chief executive officer Mark Vassella.

β€œIn the current strong demand environment, the entire BlueScope team is working as hard as they can to improve our service levels, which have been impacted by supply chain and pandemic-related disruptions.”

Shares in BlueScope Steel (ASX:BSL) last traded at $17.93 yesterday.