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Stemcor Global Holdings Ltd, which is getting an extra boost from global trade battles, has warned that things could soon turn sour as steel usage is ultimately dependent on economic growth, which is at risk from a spiraling trade war. Steve Graf, CEO UK based Stemcor, said “These are corrective measures for a world that got out of balance, they shouldn’t be in place forever. Today it’s good for our business. If it goes on for too long it probably becomes a negative, not just for us but for the entire world.”
Stemcor has emerged as a smaller business after its near collapse in 2013. It’s now focusing on the crucial link between steelmakers and end users, turning its back on physical assets and more speculative trades. The change of tack helped the company last year post its first profit since almost going under. Stemcor will on Thursday report that first-half earnings rose 14% to USD 20.6 million, with sales increasing 7 percent to USD 977 million.
It’s been a sizable turnaround for Stemcor, which was founded in 1951 and became arguably the top independent steel trader in the early 2000s. Hurt by the financial crisis, it defaulted on an USD 850 million loan in 2013 and was forced to make deals with creditors and hive off many of its assets. The Oppenheimer family lost control of the company, which is now majority owned by private equity firm Apollo Global Management LLC.