The share price of BlueScope Steel Limited (ASX: BSL) is currently up 4.4% to $21.32, making it the third-best performer on the S&P/ASX 200 Index (ASX: XJO) so far today.
The steel price has been rising amid the Russian invasion of Ukraine as well as the Chinese lockdown of some of its steel-producing regions. China is trying to limit the spread of COVID-19 cases. Russia, currently facing widespread sanctions, reportedly accounts for around 10% of the global steel trade, and Ukraine is responsible for a further 4%.
Huatai Futures analysts suggested that big buyers of steel will need to look for other suppliers.
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Could the BlueScope Steel share price keep rising?
The broker Ord Minnett thinks so. It recently set a price target on the steelmaker of $25, suggesting an upside of around 17%. The current prices allow BlueScope to achieve strong profit and cash flow in the medium term.
In the recent FY22 half-year result, it delivered a record underlying earnings before interest and tax (EBIT) of $2.2 billion and a reported net profit after tax (NPAT) of $1.64 billion.
Management noted there was good demand in key segments, especially in building and construction, coupled with "robust" margins driven by the increased steel prices in Asia and the US.
In February 2022, it said that its second half FY22 EBIT was expected to be in the range of $1.2 billion to $1.35 billion.
The Bluescope Steel share price is up almost 15% over the past year, 2.5% this year to date, and 12% over the past month.
