Bluescope shares are on the decline today. Here are the details.
The post BlueScope Steel (ASX:BSL) share price sinks 7% despite strategy update appeared first on The Motley Fool Australia. –
The Bluescope Steel Ltd (ASX: BSL) share price is sliding into the red on Monday and, at the time of writing, is trading at $21.65 apiece.
That’s a 5.87% drop from the open and well behind the S&P/ASX 200 Index (ASX: XJO)’s loss of around 2% today.
Let’s take a look at what’s at play here.
What’s up with the Bluescope Steel share price today?
There’s been no major market news for the company today, however, the Bluescope Steel share price is sliding after the company gave the first day of its investor presentation today.
Today’s presentation follows the release of Bluescope’s climate action and sustainability report on 14 September.
In its presentation, the steel giant covered its “strategy update”, revealing how it intends to tackle climate change and sustainability issues moving forward.
For instance, one of its five “key sustainability topics” outlined the company intends to deploy “financial strength for long-term sustainable growth and returns”.
This encompasses an “initial 5-year climate investment program of up to $150 million”. It also foreshadows investing over $1.5 billion in long-term business segments and “targeting 50 cents per share per annum” in its dividend program, just to name a few.
Bluescope summarised its “clear” strategy in three distinct areas: Transform (technology and climate change), Grow (its businesses), and Deliver (returns and so on).
What else is driving Bluescope shares lower?
Aside from the company putting its long-term growth vision on display, one other factor weighing on the Bluescope Steel price today is the current price of iron ore in the commodity markets.
Recent curbs in 2021 in steel production from the world’s biggest steelmaker, China, have cratered steel prices lately.
Iron ore closed 8% lower on Friday to US$104.50/tonne. That’s down around US$120/tonne or 50% since mid-July, well off a record high of US$230/tonne in May this year.
It’s important to know Bluescope is an ASX resource share that has unique exposure to producing commodities, in this case, steel. As a result, its share price can and does fluctuate coinciding with fluctuations in the broader commodity markets.
Given the nature of this relationship, and how iron ore prices have bungee-jumped since July, it’s clear to see what’s fuelling the Bluescope Steel share price today.
Bluescope Steel share price snapshot
The Bluescope Steel share price has climbed 23% this year to date. However, it has struggled lately and is 12% in the red over the last month.
Despite this, Bluescope’s share price has gained 67% over the past 12 months which has outpaced the broad index’s return of around 25% in the past year.
Should you invest $1,000 in Bluescope Steel right now?
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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.