SÃO PAULO Flat
steel prices from Brazils Cia. Siderúrgica
Nacional SA (CSN) to its domestic market are expected to
increase 5 to 8 percent sequentially during the second quarter,
according to commercial executive director Luis Fernando
"We see room for further price
increases in the Brazilian market in the second half of this
year, as the premium (the difference between domestic and
import tags) in the country is at 10 percent at the moment," he
said May 16 in an earnings conference call.
Global steel producers will
increase their prices starting in July in an attempt to
"survive," Martinez said. "Mills have been recording net
losses, and there are two measures to take to overcome this
situation: reduce costs or increase sales prices."
CSNs net income plunged to
16.3 million reais ($8 million) for the three months ended
March 31, down 82.4 percent from 92.6 million reais in the same
year-ago period, despite a 6-percent increase in revenue to
3.64 billion reais ($1.79 billion) from $3.44 billion
The steel and iron ore producer
cited an increase in its costs of goods sold and lower iron ore
shipments for the drop in net income.
During the first quarter,
CSNs average selling prices were 1,550 to 1,620 reais
($761 to $795) per tonne for hot-rolled coil, 1,920 to 1,980
reais ($942 to $971) per tonne for cold-rolled coil and 2,200
to 2,300 reais ($1,079 to $1,128) per tonne for hot-dipped
galvanized coil, Martinez told analysts.
CSN again turned to buying slab
from third parties in the first quarter to maintain its
finished steel output levels, the company said.
CSN bought 118,000 tonnes of
slab during the period vs. 137,000 tonnes in the fourth quarter
of 2012 due to maintenance at its melt shop.
In turn, CSNs slab
production for the quarter was affected by a problem at one of
the two reclaimers at its Casa de Pedra iron ore mine in Minas
"The quality of the iron ore
(from Casa de Pedra) got worse and we are forced to use more
coke and pellet, which made our slab output costs very high in
the first quarter of 2013," Martinez said. "Thus, we have
decided to purchase slabs in the market to offset these
CSNs slab output costs
might return to normal in the second quarter, to about $500 per
tonne, Martinez said. "We do not expect to buy more slab
cargoes this quarter."
Iron ore output at Casa de Pedra
started to return to normal levels in late April.
CSN is maintaining its iron ore
export target for 2013 at 29 million to 30 million tonnes,
mining director Daniel dos Santos said.
Iron ore shipments, all of which
were exported, fell to 4.14 million tonnes in the quarter from
6.69 million tonnes a year earlier.
A version of this article
was first published by AMM sister publication Steel