What happened

Shares of Brazilian steelmaker Companhia Siderurgica Nacional (NYSE:SID) jumped more than 10% in early Tuesday trading before falling back to book a still respectable 9.6% gain as of 12:15 p.m. EDT.

Yet Companhia Siderurgica Nacional didn't report any earnings today, nor does there seem to be any other company-specific news that's moving the stock. So the question is why, in an era of higher tariffs on steel imports to the U.S., a Brazilian steel "exporter" would be doing so well?

Molten steel pouring in a factory

Why is this steel stock suddenly red hot? Image source: Getty Images.

So what

Here's one possible explanation: This morning, German metals distributor Kloeckner announced that its US business is "benefiting heavily from price increases following that country's imposition of tariffs in the second quarter," as reported by S&P Global Platts. Investors may be making an analogy to Companhia Siderurgica Nacional, which owns a 400,000-ton-per-year steel factory in Indiana, and thinking that if Kloeckner is doing well because of the tariffs, then Companhia Siderurgica Nacional might do similarly well.

Now what

Whether or not that thinking is valid, Companhia Siderurgica Nacional commented back in March that it doesn't expect to see any "significant" damage to its business from the tariffs. Only 6% of its steel exports go to the U.S. after all, and the company says it can easily divert that production to the internal Brazilian market.

With Companhia Siderurgica Nacional stock down 10% over the past year, and the danger perhaps not as great as was once thought, it could have been due for a rebound.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.