The United States and the United Kingdom have begun talks to remove tariffs on steel and aluminum, which were imposed during the administration of former US President Donald Trump.
The United States and the United Kingdom released a joint statement indicating that they were working on an accelerated agreement to help the viability of the above industries in the markets of both countries.
The statement added that the potential agreement would thus strengthen their democratic alliance.
In 2018, the United States imposed import taxes of 25% on foreign steel and 10% on aluminum during its dispute with the European Union (EU). The Trump administration introduced the tariffs, calling them a threat to national security.
Amidst this development, let’s explore the investment prospects of 2 steel and aluminum stocks listed on the FTSE 100 index:
- Evraz PLC (LON: EVR)
Evraz is the UK based vertically integrated steel mining and fabrication group. It is part of the FTSE 100 index.
The group intends to split its coal assets under PJSC Raspadska (RASP), which will lead to 2 listed companies. The split will help both companies have a higher level of transparency regarding their sustainability goals, better aligned capital allocation and allow RASP to pursue an independent strategy and more.
The group recently held a general meeting during which 100% of its shareholders approved its plans to spin off the coal assets.
The settlement-delivery date for the transfer of RASP shares to Evraz shareholders after the split could take place around April 7.
Image source: Refinitiv
The group’s shares ended at 567.20 GBX, up 1.79% on January 19, while the FTSE 100 index closed at 7,589.66, up 0.35%.
The company’s market capitalization was £8,127.82 million and it gave a one-year return of 12.58% as of January 19.
- Rio Tinto PLC (LON: RIO)
Rio Tinto is a British-Australian metalworking and mining giant and is among the largest aluminum producers in the world.
Its aluminum production in the fourth quarter of 2021 was 757 kt, down 7% from the fourth quarter of 2020. And its aluminum production in the fiscal year 2021 was 3,151, down 1 % compared to the 2020 financial year.
The 1% drop in production was due to a strike (which began in 2021) that impacted capacity at the Kitimat project located in British Columbia. However, the company reached an agreement with the project 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 methods for making steel.
Image source: Refinitiv
Shares in the group closed at 5,654.00 GBX, up 3.88% on January 19. The company’s market capitalization was £70,569.87 million as of January 19.