Sweden's traditional steel mill, SSAB is in an enviable position relative to its peers - for three reasons:
1) Its plants are strategically well placed on both sides of the Atlantic; thus, it will not be caught between millstones when the US and the EU get entangled in a trade war centred on steel and aluminium. Indeed, the company is set to downright profit from it, when its markets both in the US and the EU will get protection from Chinese and Korean competition.
2) The EU's and particularly Germany's massive drive for investment (and rearmament) guarantee a gargantuan demand for steel and steel products in the years to come. This will have a wholesome influence on both volumes and margins of SSAB (with the latter additionally buttressed by protectionist measures, see above). Times as these always call for construction materials and basic resources in your portfolio - and SSAB happens to fit the bill perfectly.
3) The company's home currency, the Swedish Krona is at multi-year lows relative to both the euro and the US-dollar. And opposite to the original expectation of this narrative, the Riksbank's rate decision and outlook on 20 March points to relatively stable short-term SEK interest rates for the remainder of the year, supporting the currency against EUR in particular. Meanwhile, GDP growth, too, stands to perform relatively better than both the US and the EU at large, since the Swedish economy is especially well-positioned to profit from Europe's rediscovered zeal and oomph.
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Disclaimer
The user PittTheYounger has a position in OM:SSAB A. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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