Brazil’s CSN sees potential for negotiating a steel quota system with the U.S. following recent tariffs imposed by President Trump. The company reported a fourth-quarter loss but exceeded earnings expectations, resulting in significant stock increases. Analysts remain optimistic about CSN’s financial outlook as the company seeks dialogue with the U.S. to address trade issues.
Brazilian steelmaker Companhia Siderúrgica Nacional (CSN) anticipates potential negotiations regarding a quota mechanism with the United States amid ongoing tariff discussions. Following U.S. President Donald Trump’s imposition of tariffs on steel and aluminum imports, CSN has opted for dialogue instead of immediate retaliation against what they termed “unjustifiable” tariffs. These tariffs, effective from March 8, form part of Trump’s broader strategy to reshape global trade in favor of the U.S.
CSN’s commercial head, Luis Fernando Martinez, expressed optimism during an earnings call, indicating that negotiations similar to those conducted in 2018 could resume within the next two months. He suggested a quota system could emerge from such discussions, noting the necessity for dialogue as the U.S. continues to depend on steel imports, particularly plates and sheets.
Despite experiencing a fourth-quarter net loss of 85 million reais (approximately $14.66 million) attributed to high financial expenses, CSN reported stronger-than-expected core earnings. The company achieved adjusted EBITDA of 3.33 billion reais, which was an 8% decrease year-on-year but surpassed analysts’ predictions of 2.87 billion reais. Additionally, net revenue reached 12.03 billion reais, exceeding expectations of 11.8 billion reais.
Following the earnings release, CSN’s shares rose by over 7.5%, while its mining division, CSN Mineracao, experienced an increase of around 10%. This performance placed them among the top gainers on Brazil’s Bovespa stock index, which recorded a rise of 1.3%. Analysts from JPMorgan highlighted that both CSN and CSN Mineracao exceeded quarterly forecasts, contributing to a positive outlook and potential upward revisions of consensus estimates.
In summary, CSN is optimistic about upcoming negotiations with the United States regarding steel quotas, especially in the wake of recent import tariffs. Despite reporting a net loss in the last quarter, the company’s earnings exceeded market expectations, leading to a significant rise in its stock. This performance has positioned CSN favorably in the market, indicating continued strong operations despite challenging financial pressures.
Original Source: www.marketscreener.com
