Fund Manager Summary
The fund managers believe that the outlook for BlueScope Steel Ltd remains promising despite recent share price fluctuations, with the opportunity to capitalize on robust steel demand in the U.S. and Australia. They note that while U.S. steel spreads have declined from record highs, they are expected to stabilize at healthy levels. The recent acquisitions of MetalX and Coil Coatings, along with the expansion of the North Star plant, are anticipated to enhance earnings significantly. Furthermore, the company’s strong net cash position supports a $985m on-market share buyback program and future low-cost expansions. The planned $1b Port Kembla upgrade aligns with BlueScope's ESG and carbon abatement goals. With a valuation of approximately 4x FY23 EV/EBIT and 5.6x FY23 P/E, the fund managers consider BlueScope to be significantly undervalued.
Source: Trading View
Commentary From The Managers
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Pendal Group
3 Nov 2025
$21.82
Summary
- Pendal Group notes that BlueScope Steel (BSL) has outperformed with a gain of 4.3%.
- The performance is attributed to a rally in US steel prices and spreads.
- This rally is driven by resilient demand and seasonal maintenance outages that have curtailed supply.
- Three US steel companies reported quarterly results, indicating a relatively optimistic tone regarding steel demand.
- Tariffs are affecting imports, contributing to the positive outlook.
- Pendal Group continues to hold its position in BlueScope Steel due to these favorable market conditions.
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Commentary From The Managers
Pendal Group
3 Nov 2025
$21.82
- Pendal Group notes that BlueScope Steel (BSL) has outperformed with a gain of 4.3%.
- The performance is attributed to a rally in US steel prices and spreads.
- This rally is driven by resilient demand and seasonal maintenance outages that have curtailed supply.
- Three US steel companies reported quarterly results, indicating a relatively optimistic tone regarding steel demand.
- Tariffs are affecting imports, contributing to the positive outlook.
- Pendal Group continues to hold its position in BlueScope Steel due to these favorable market conditions.
Summary
Ten Cap
31 Oct 2025
$22.90
- Ten Cap introduced BlueScope Steel (BSL) to the portfolio as part of a constructive view on the US steel sector.
- The investment follows recent share price falls, presenting a potential opportunity.
- BSL offers leverage to a recovery in global steel demand, aligning with Ten Cap's market outlook.
- The company demonstrates strong capital discipline and effective cash generation, which are key factors in the investment decision.
Summary
Airlie Funds Management
30 June 2025
$23.11
- Airlie Funds Management identifies BlueScope Steel (ASX: BSL) as a core holding due to market mispricing influenced by short-term perspectives.
- BlueScope’s earnings are significantly affected by steel spreads, which are cyclical and depend on input costs versus prevailing steel prices.
- The company is making capital investments aimed at growing its organic earnings base and reducing earnings cyclicality over time.
- BlueScope's competitive advantage in Australia is reinforced by new coating capacity in Western Sydney and modernization efforts at the Port Kembla plate mill.
- In North America, BlueScope’s electric arc furnace is positioned at the bottom of the US cost curve, supported by initiatives to increase volume and maintain low unit costs.
- Currently, BlueScope boasts a robust balance sheet with a net cash position and a portfolio of surplus property assets that are undervalued by the market.
- On a mid-cycle earnings basis, BlueScope is trading at a forward P/E of less than 10x, indicating significant undervaluation of the business.
Summary
Ten Cap
31 May 2025
$23.75
- BlueScope (BSL) has lagged due to pressure on margins from softer steel spreads in the US.
- Higher input costs have also contributed to the company's challenges.
- At the Macquarie conference, BlueScope fell short of upgrading guidance, leading to investor disappointment.
- Investors remain cautious about the FY26 outlook.
- Ten Cap continues to hold because they believe in the long-term potential despite current challenges.
Summary
Yarra Capital Management
31 May 2025
$23.75
- BlueScope Steel (BSL): Yarra Capital Management maintains an overweight position despite recent underperformance linked to US steel tariff expectations.
- US Tariffs: The easing of US tariff expectations presents potential upside risks to US steel spreads.
- North Star Steel Mill: The North Star steel mill in the US stands to benefit significantly from US protectionist policies.
- Strong Management: Yarra Capital Management emphasizes that BSL is a well-managed company with opportunities in capital management.
- Valuation Upside: There is potential for valuation improvement due to US protectionism and improving macroeconomic conditions in China.
Summary
Perpetual Asset Management
31 May 2025
$23.75
- BlueScope detracted from portfolio performance in May, with a stock decline of 4.7% due to the US Steel and Nippon partnership approval.
- The partnership involves significant investment in the US, including plans for a new steel mill and job preservation.
- The deal was approved despite concerns from the steel lobby about potential industry distress and job cuts among incumbents.
- The approval slows down industry consolidation, which is essential for improving long-term industry rationality regarding capacity and pricing.
- Positive short-term trends are noted, with increases in hot-rolled coil steel prices.
- BlueScope is recognized as one of the highest-quality steel producers globally, supported by a capable management team.
- The company has a significant asset in Port Kembla and the Colorbond brand, which enhances margins and presents overseas opportunities.
Summary
Firetrail Investments
31 May 2025
$23.75
- Firetrail Investments continues to hold an investment in BlueScope Steel Ltd.
- BlueScope shares have recently underperformed due to a ~10% retracement in US steel prices.
- Tariffs are expected to provide some support for pricing in the steel market.
- There is growing market concern regarding the potential impact of ongoing uncertainty on steel demand in the US.
Summary
Blackwattle Investment Partners
31 May 2025
$23.75
- BlueScope (BSL) detracted from performance in May.
- BSL is inherently more volatile and economically sensitive due to exposure to commodity prices.
- Concerns around weakening US construction activity and auto demand led to softness in share price.
- BSL enjoys better returns than its peers due to its premium Colorbond steel offering.
- It operates arguably the lowest cost mini steel mill in the US (North Star).
- US tariffs present further upside for BSL, benefiting from higher US steel prices.
- Recent trends in June suggest that US steel tariffs may have longer-term traction.
Summary
Perpetual Asset Management
30 Apr 2025
$23.87
- BlueScope Steel (12.1%) was a positive contributor to relative performance in April.
- The share price was supported by broader market dynamics rather than company-specific catalysts.
- U.S. peers Nucor and Steel Dynamics exceeded first-quarter earnings expectations.
- Outlook commentary from U.S. peers remains reasonably upbeat despite concerns of a slowdown in U.S. economic conditions.
- Steel spreads in the U.S. remain above BlueScope’s FY25 guidance, indicating upside potential in pricing dynamics.
- Perpetual Asset Management continues to see BlueScope’s U.S. assets as well positioned to benefit from potential tariff outcomes.
- Domestically, Asian steel spreads remain depressed, but there is potential for significant improvements in profitability.
- Future profitability improvements are expected from proactive cost management and ongoing volume growth in higher margin products like Colorbond and Truecore.
Summary
L1 Capital
30 Apr 2025
$23.87
- BlueScope shares outperformed with a +12% increase, driven by strong spot U.S. steel spreads above US$500/t.
- Current spreads are significantly higher than BlueScope’s H2 FY25 guidance of US$340/t.
- Key peers Nucor and Steel Dynamics reported strong Q1 earnings, exceeding expectations with robust shipment volumes.
- Positive near-term demand outlook amidst tariff uncertainty.
- In contrast, Asian steel prices remain low due to excess Chinese steel production exceeding 100Mtpa.
- BlueScope’s half-year results in February 2025 aim for an annual EBIT improvement target exceeding $1b.
- This includes over $200m cost reductions, $500m from growth investments, and $500m to $1b from improved market conditions.
- These targets suggest a significantly higher future earnings base projected to exceed $1.8b, compared to the current EBIT run-rate of approximately $600m.
- L1 Capital believes the market underappreciates BlueScope’s unique asset base and the resilience of the consolidated U.S. steel sector.
Summary
L1 Capital
31 Mar 2025
$21.28
- BlueScope’s share price increased by 13% on results day, reflecting positive market reaction.
- Company presented a medium-term earnings opportunity during the February results.
- Annual EBIT improvement target set well above $1 billion, indicating strong growth potential.
- Target includes over $200 million in cost reductions.
- $500 million from growth investments is anticipated.
- Potential for an additional $500 million to $1 billion from improved market conditions.
- This guidance suggests a future earnings base of over $1.8 billion of EBIT, compared to the current run-rate of approximately $600 million.
- Investor sentiment has improved despite challenging market conditions in Asia, influenced by cheap Chinese steel exports.
Summary
Airlie Funds Management
31 Mar 2025
$21.28
- BlueScope Steel has seen a significant increase of 15%.
- The company is a rare direct beneficiary of tariffs.
- US steel spreads have increased dramatically since Trump's administration began.
- BlueScope is focusing on self-help initiatives to enhance returns throughout the cycle.
- A further $200m cost reduction is on track for completion by the end of FY26.
- Additionally, a $200-300m working capital release is expected in the same timeframe.
Summary
Tyndall Asset Management
31 Mar 2025
$21.28
- BlueScope Steel underperformed in March due to general uncertainty in the economic outlook.
- Despite the underperformance, US steel spreads continued to increase.
- Tariffs are expected to support US steel pricing.
- Concerns regarding the broader economic impact have overshadowed the benefits from tariffs.
- Tyndall Asset Management continues to hold their position in BlueScope Steel.
Summary
Perpetual Asset Management
28 Feb 2025
$24.26
- BlueScope Steel's share price rose by +15.4% in February, reflecting better than expected results.
- Medium-term earnings outlook provided clarity on expected returns from capital investments.
- Earnings and free cash flow outcomes were ahead of market expectations.
- The Colorbond brand in Australia showed strong market share gains despite a weak market.
- Management's decision to delay midstream investment in the US was viewed positively.
- Steel pricing is at a level with asymmetric upside potential, with trends indicating rising hot-rolled coil steel prices in the US.
- BlueScope is recognized as one of the highest quality steel producers globally.
- The company benefits from a capable management team and low-cost US steel assets.
- The Colorbond brand not only boosts margins but also represents a substantial overseas opportunity.
Summary
Milford Asset Management
28 Feb 2025
$24.26
- BlueScope Steel experienced a strong performance with a 16.0% increase in value.
- The company reported results highlighting medium-term cost opportunities and prudent capital allocation.
- Benefits from higher US steel prices were noted in the results.
- Milford Asset Management took profits on several gold mining positions that performed well.
- Despite taking profits, Milford remains medium bullish on gold and plans to add positions on pullbacks.
Summary
Perpetual Asset Management
31 Jan 2025
$21.29
- BlueScope Steel Limited was a top contributor to the PIC portfolio performance.
- The stock rose 13.9% in January, driven by positive industry news.
- Press speculation of a joint bid by Cleveland-Cliffs Inc and Nucor Corp for US Steel influenced market sentiment.
- Despite short-term challenges in steel spread dynamics, Perpetual Asset Management sees alignment with long-term opportunities.
- Steel pricing has reached a level with asymmetric upside potential.
- Positive trends observed in the competitive landscape, particularly with increasing hot-rolled coil steel prices.
- BlueScope is recognized as one of the highest quality steel producers globally.
- The company benefits from a capable management team and a low-cost US-based steel mill.
- The Colorbond brand enhances group margins and return levels.
Summary
L1 Capital
31 Dec 2024
$18.69
- BlueScope Steel shares underperformed, down 16% due to weak global steel markets.
- Asian steel spreads remain depressed, impacted by excess Chinese steel production and elevated exports.
- U.S. steel markets have weakened, affected by uncertainty regarding the upcoming government administration and inflation.
- BlueScope announced a target to deliver ~$200m in cost savings, highlighting a focus on productivity improvements.
- The company aims to grow its U.S. business with the expansion of the North Star steelmaking facility and further investment.
- L1 Capital believes the market significantly undervalues BlueScope’s asset base and the resilience of the U.S. steel sector.
Summary
Blackwattle Investment Partners
31 Dec 2024
$18.69
- Bluescope (BSL): Underperformance due to the collapse of USA Northstar Steel spreads (-22%), a proxy for EBIT per ton generated.
- Blackwattle Investment Partners continues to see Bluescope positioned well for a recovery.
- Factors supporting recovery include import tariffs on China steel imports which will solidify domestic steel manufacturing economics.
- Improved steel demand anticipated from onshoring and a recovery in end markets.
- Strong balance sheet to withstand cyclical weakness, reinforced by significant freehold land holdings.
- While Bluescope may not meet the traditional definition of Quality due to volatile earnings, its Australian business is unique.
- Features of uniqueness include ColourBond brand vertical integration that allows for superior profitability compared to traditional steel mills.
- The NorthStar Business is recognized as one of the lowest cost steel makers in the USA, supported by high utilisation and proximity to customers.
- Management has demonstrated a strong track record of value creation, notably through the growth of ColourBond and the NorthStar acquisition.
Summary
Cooper Investors
31 Dec 2024
$18.69
- Cooper Investors established a position in BlueScope Steel (BSL) during the December quarter.
- BSL is a leading manufacturer and supplier of steel products for the building and construction industries.
- The company has key operations located in Australia and North America.
- BSL has repositioned its Australian product offering from commoditised steel to branded products like COLORBOND steel.
- This repositioning provides insulation against fluctuations in steel spreads.
- The investment was initiated at a low point in the cycle, with steel spreads at multi-year cyclical lows.
- The share price level has asset-backed support (NTA/share).
- Cooper Investors views the BSL position as a way to gain exposure to a rebound in the undersupply of residential property construction.
- This undersupply is seen as a multi-year thematic across both Australia and the US.
- BSL benefits from tailwinds due to Trump-imposed tariffs on steel imports, with over 40% of revenue expected from North America in FY24.
- Cooper Investors believes BSL remains one of the few quality cyclical companies in the building materials sector.
- This is especially relevant following significant corporate activity in the ASX, with CSR, Boral, and Adbri all acquired in 2024.
Summary
L1 Capital
30 Sept 2024
$22.20
- BlueScope Steel Ltd is a leading steel producer focused on ASEAN and U.S. markets, formed from a BHP spin-off in 2002.
- The company operates primary steel making facilities and value-added coated and painted products, including well-known brands like Colorbond and Truecore.
- L1 Capital highlights BlueScope's resilience and strong management as key factors contributing to its positive performance despite challenging market conditions.
- BlueScope's earnings are diversified across four regions: North America (53% of earnings), Australia (32%), Asia (11%), and NZ & Pacific (4%).
- The North Star facility in Ohio is a low-cost producer with significant growth potential due to its strategic location and access to low-cost power.
- In Australia, the Port Kembla facility is the primary source of domestic steel production, with a strong focus on high-margin coated products.
- BlueScope's coated products can command prices significantly above commoditized steel, enhancing margin capture.
- The investment thesis is based on BlueScope's strong cash generation, undervalued asset base, and resilience in the U.S. steel sector.
- BlueScope is currently trading at attractive multiples (<5x FY26 EBITDA and <12x FY26 P/E), indicating potential for growth.
- Future catalysts include the U.S. Presidential elections, recovery of Asian steel spreads, and strategic investments in U.S. operations.
- Key growth initiatives include the expansion of the North Star facility and significant investments in downstream capabilities.
- BlueScope's management team is viewed as one of the strongest in the ASX 200, contributing to the company's strategic direction.
- L1 Capital continues to hold BlueScope due to its unique asset base and growth potential, particularly in high-quality downstream products.
- Plans to monetize excess land holdings may unlock additional value, with potential worth exceeding $1 billion.
Summary
L1 Capital
31 May 2024
$21.14
- BlueScope Steel shares saw a -8% underperformance due to lower U.S. steel prices.
- Price declines are attributed to increased domestic capacity and heightened inbound import supply influenced by past orders.
- There is relatively weak demand impacting the pricing landscape.
- Despite the challenges, current U.S. steel spreads remain healthy, ensuring strong profitability from BlueScope's U.S. operations.
- BlueScope is committed to growing its U.S. business, including the expansion of the North Star steelmaking facility.
- The company is actively evaluating additional investments to enhance its product offerings further downstream.
- L1 Capital believes the market undervalues BlueScope’s strategic asset base and the resilience within the U.S. steel sector.
Summary
L1 Capital
31 Dec 2023
$23.54
- BlueScope Steel has shown a strong performance with a +13% increase.
- The performance is driven by the strengthening of U.S. steel spreads.
- In December, U.S. steel prices rose by +9% and +61% during the December quarter.
- This price increase follows a resolution to the United Auto Workers strike.
- U.S. steel delivery lead times and prices are well above historic averages, indicating potential growth.
- Recent M&A activity in the U.S. is promising, especially Nippon Steel’s acquisition of U.S. Steel for ~US$14b.
- This acquisition bodes well for the future value of BlueScope’s U.S. operations.
- BlueScope is expanding its U.S. capacity by 850ktpa at the North Star facility in Ohio.
- They have also acquired Coil Coatings, the U.S.’s second largest metal coating/painting company.
- Establishing BlueScope Recycling follows the acquisition of MetalX recycling business.
- L1 Capital continues to believe that the market undervalues BlueScope’s unique and strategic asset base.
- There is recognition of the resilience of the largely consolidated U.S. steel sector.
Summary
L1 Capital
30 Nov 2023
$20.78
- BlueScope Steel shares increased by 11% over the month.
- The rise was driven by strengthening U.S. steel spreads following the resolution of the United Auto Workers strike.
- Company updated first half FY24 earnings guidance to the top-end of the previously provided range.
- Strengthening U.S. steel spreads expected to provide a strong tailwind for second half earnings.
- BlueScope focuses on expanding its U.S. operations, including:
- Increasing capacity at the North Star facility in Ohio by 850ktpa.
- Acquisition of the U.S.’s second largest metal coating/painting company, Coil Coatings.
- Establishing BlueScope Recycling following the acquisition of MetalX recycling business.
- L1 Capital believes the market is significantly undervaluing BlueScope’s strategic asset base and the resilience of the U.S. steel sector.
Summary
Airlie Funds Management
30 Sept 2023
$19.54
- Airlie Funds Management currently does not hold BlueScope Steel in the portfolio.
- BlueScope’s asset base is considered high quality.
- The company has a strong balance sheet.
- Management at BlueScope is regarded as excellent.
- Recent visit to BlueScope’s North Star asset in Delta, Ohio, enhanced positive outlook on the asset and the US steel sector.
- Expectations for medium-term support for demand due to capacity consolidation, manufacturing reshoring, and decarbonisation spending.
- In North America, BlueScope aims to leverage its low cost position to develop a higher-margin, less cyclical downstream business.
- Currently, Airlie Funds Management remains on the sidelines due to uncertainty in the short-term direction of steel prices.
- Despite this, Airlie Funds Management continues to monitor BlueScope closely.
Summary
L1 Capital
30 June 2023
$20.55
- BlueScope (Long +11%) shares strengthened over the month.
- U.S. steel spreads continued to hold above long-run averages, aiding second half earnings expectations.
- BlueScope is committed to growing its U.S. operations through three key initiatives:
- 850ktpa capacity expansion and 500ktpa debottlenecking project at North Star facility in Ohio.
- Acquisition of the U.S.’s second largest metal coating/painting company, Coil Coatings.
- Establishment of BlueScope Recycling from the acquisition of MetalX recycling business.
- Despite recent share price strength, L1 Capital continues to believe the market significantly undervalues BlueScope’s unique and strategic asset base.
Summary
L1 Capital
31 Mar 2023
$20.15
- BlueScope (Long +20%) shares strengthened over the quarter as U.S. steel spreads recovered, enhancing second half earnings expectations.
- Focus on U.S. operations growth with an 850ktpa capacity expansion at the North Star facility in Ohio.
- Acquisition of Coil Coatings, the U.S.’s second largest metal coating/painting company.
- Establishment of BlueScope Recycling through the acquisition of the MetalX recycling business.
- Despite the share price rally, L1 Capital believes the market undervalues BlueScope’s unique and strategic asset base.
Summary
L1 Capital
30 Sept 2022
$15.19
- BlueScope Steel shares weakened over the month along with most offshore steel-making companies.
- U.S. and Asian steel spreads have declined, although they are starting to stabilise.
- U.S. steel spreads have fallen from record levels but remain healthy.
- BlueScope is focusing on expanding its U.S. operations, including a significant expansion at the North Star facility.
- The acquisition of Coil Coatings, the U.S.'s second largest metal coating/painting company, is part of their growth strategy.
- BlueScope is establishing BlueScope Recycling from its acquisition of the MetalX recycling business.
- With a strong net cash balance sheet, BlueScope is expected to continue its share buyback program.
- Current trading valuations are around ~4.0x consensus FY23 EV/EBIT and ~6.0x consensus FY23 PE.
- L1 Capital continues to believe the market undervalues BlueScope's unique and strategic asset base.
Summary
L1 Capital
30 June 2022
$15.90
- BlueScope Steel shares weakened over the quarter alongside most offshore steel-making companies.
- L1 Capital took the opportunity to top up their position in BlueScope.
- Despite rising bond yields impacting housing sentiment, steel demand in the U.S. and Australia remains robust.
- U.S. steel spreads, though from record levels, are expected to stay healthy near-term as import arbitrage has diminished.
- BlueScope recently acquired MetalX (scrap business) and Coil Coatings (second largest metal coating company in the U.S.).
- Expansion of the North Star plant in Ohio by 850kt expected to benefit earnings over the next 18 months.
- With a strong net cash balance sheet, BlueScope is expected to continue its $985m on-market share buyback program.
- The company plans a low-cost expansion of up to 1.4mt of steel at North Star in the coming years.
- BlueScope has committed to a $1b Port Kembla blast furnace reline and upgrade over the next four years, supporting its ESG and carbon abatement targets.
- Currently trading at ~4x FY23 EV/EBIT and 5.6x FY23 P/E, indicating significant undervaluation.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"While the steel sector faces headwinds, it seems BlueScope Steel’s strategic acquisitions and robust cash flow position it to capitalize on demand resilience. At current valuations, it appears to be a hidden gem awaiting recognition in a volatile market."
Last Updated: 03 Nov 2025
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Frequently Asked Questions
Who is investing in BlueScope Steel Ltd (ASX:BSL)?
Fund managers including L1 Capital, Blackwattle Investment Partners, Yarra Capital Management, Cooper Investors, Airlie Funds Management, Firetrail Investments , Ten Cap, Milford Asset Management, Tyndall Asset Management, Perpetual Asset Management and Pendal Group have invested in BlueScope Steel Ltd (ASX:BSL).
Why do fund managers invest in BlueScope Steel Ltd?
Fund managers invest in BlueScope Steel Ltd due to its strong position in the steel market, with robust demand in the U.S. and Australia despite recent share price declines. The company has strategically expanded through acquisitions and facility upgrades, including the recent purchase of MetalX and Coil Coatings, which enhance its earnings potential. BlueScope's strong cash position supports ongoing share buybacks and low-cost expansions, while significant investments in ESG initiatives demonstrate a commitment to sustainability. Additionally, the current valuation metrics indicate that BlueScope is undervalued relative to its strategic assets.
What happened to BlueScope Steel Ltd (ASX:BSL)?
Fund managers are investing in BlueScope Steel Ltd due to its strong performance linked to rising US steel prices and resilient demand, alongside seasonal supply constraints. The company is viewed as a leveraged play on a recovery in global steel demand, bolstered by its capital discipline and robust cash generation capabilities.