(Radiocor) Good performance by Tenaris in Piazza Affari, with oil companies rising in the wake of crude oil price increases and with the group benefiting from the news of the increase in US duties on pipes imported from Korea. Tenaris shares are up 2,17% to 16,48 euros in a market up 0,25%
The US Department of Commerce has imposed tariffs on Korea, but with a significant amount only on Nexteel. According to Equita estimates (this is about 30% of Korean imports into the US or about 300-350 thousand tons in 2017, equal to 7-8% of US demand. In particular, the Department of Commerce has announced a tariff of 24,92% on Nexteel's import of Octg pipes, 2,76% on SeAH Steel, and 13,84% on Hyundai Steel and other South Korean producers.For Nexteel the tariffs applied are higher compared to those applied in mid-2014 (9,89%), while for the other operators they are more or less similar (Hyundai 15,75%, others 12,82%). "We believe - writes Equita - that the duties applied on Nexteel could significantly reduce (if not even eliminate) the volumes imported by the company into the US, while those of the other Korean operators will probably remain on the market.We expect that the Pipelogix (US pipe price index), as a result of the ruling, will continue to rise low-to-mid single digit". Analysts improve the target price by 5% to 15,8 euros due to the improvement of the 2017 price estimates (we now estimate 2017 average prices at +5% from 0% and Ebitda at 1,03 966 billion from 30 million). The USA represents 40% of Tenaris' turnover. The import of pipes in the US market currently covers 50-XNUMX% of the demand for OCTG pipes in the US, and Korea, in particular, represents the main importer of pipes in the US market.
In addition to the Washington decision, Tenaris benefits from an increase in the target price launched by Mediobanca Securities, to 18,5 from 10,5 euros. The broker justifies the upgrade with a revision of the estimates in the light of the recovery beyond expectations of the extraction activity in the USA.
According to Mediobanca, if the scenario turns out to be brilliant, with a faster and more massive recovery of volumes and prices, Tenaris' target price could reach 23 euros.
