CSN Looks to Negotiate Steel Quotas with U.S. Amid Tariff Changes

Brazilian steelmaker CSN is exploring negotiations for steel quotas with the U.S. after tariffs were imposed by President Trump. Despite experiencing a net loss, CSN’s earnings surpassed expectations, leading to a positive market response.

The Brazilian steelmaker CSN has identified opportunities for Brazil to negotiate a quota mechanism with the United States in the near future. Following recent tariffs imposed by U.S. President Donald Trump on steel and aluminum imports, Brazil aims to initiate dialogue rather than retaliate against what it terms “unjustifiable” tariffs.

CSN’s commercial head, Luis Fernando Martinez, expressed belief that within the next two months, negotiations akin to those from 2018 could be initiated, potentially establishing a quota system. It is important to note that the U.S. continues to be a net importer of various steel products, which supports Brazil’s proposal.

In their recent earnings report, CSN reported a fourth-quarter net loss of 85 million reais, attributed to high financial expenses. However, the company noted core earnings surpassed market expectations, with adjusted EBITDA reaching 3.33 billion reais, which is an 8% decline year-on-year but exceeded analysts’ predictions of 2.87 billion reais.

CSN’s net revenue amounted to 12.03 billion reais, outperforming the expected 11.8 billion reais. Following the earnings report, CSN’s shares rose by over 7.5%, with the mining arm, CSN Mineracao, increasing by around 10%. Both divisions were leading gainers on Brazil’s Bovespa index, which experienced a 1.3% rise. Analysts from JPMorgan noted that the results surpassed their forecasts, suggesting an impending upward revision of consensus estimates.

Brazil’s CSN is positioning itself to negotiate potential steel quotas with the United States, aiming for dialogue rather than retaliation against imposed tariffs. Despite reporting a loss due to financial expenses, CSN exceeded market expectations in core earnings, contributing positively to its stock performance. The company’s proactive approach and strong financial results indicate a promising outlook.

Original Source: www.marketscreener.com