Brazil's CSN expects flat steel, upside ahead

: Metals
25/05/09

Brazil's mining and steel firm CSN expects strong domestic demand to keep steel prices flat in 2025, with the potential for an uptrend in the coming months.

Sales to the agricultural machinery and automotive industries should continue to trend upward, the company said.

Civil construction sales have been solid and could tick up as the rainy season ends in Brazil.

"Demand is good," executive director Luis Fernando Martinez said, adding that the firm will hold back price gains "to maintain profitability."

The price of CSN's overall steel products increased by 5pc in the first quarter from a year earlier thanks to a 7pc increase in demand.

Average steel prices hit a two-year high at R5,252 ($928)/metric tonne from R5,008/t a year earlier.

Steel consumption has been climbing in Brazil and sales could have been stronger if not for growing competition from imports, the company said. Brazil's import penetration hit 27pc of the domestic market in the quarter, outstripping CSN's domestic market share.

"I've never seen this in the [23 years] I've been in the company," Martinez said, calling the situation "unsustainable."

Despite what he described as an inefficient tariff policy against imports, prices are expected to remain at current levels. Brazil implemented a 25pc tariff on 11 steel products from China in June 2024. The policy is set to expire by the end of May.

Results

Shipments reached 1.14mn t in the period, up 5pc from 1.08mn t a year earlier, driven by 8pc growth in domestic market sales.

Slab production fell by 16pc to 812,000t because of a stoppage at the Rio de Janeiro-based Blast Furnace 2 in January. The company expects the asset to remain under maintenance for at least three more months.

CSN produced 775,000t of flat-rolled steel in the quarter, 11pc less than a year prior. Long steel output increased by 12pc to 58,000t from a year earlier.

The company registered a R732mn loss in the first quarter, 53pc higher than the R480mn loss a year before.

By Isabel Filgueiras

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