CSN forecasts a positive outlook for steel and mining driven by China and the US

CSN expects growth in EBITDA and cash flow and, consequently, a reduction in its debt, with stronger results in mining and margins above 50%.

The information was released by Marcelo Cunha Ribeiro, CFO and investor relations officer at CSN, during the earnings conference call held in early March. “We will aim for a level of R$ 15 billion in net cash as early as the first quarter, maintaining financial discipline and with the prospect of good results, stronger prices and synergies,” he said.

CSN's CEO, Benjamin Steinbruch, reaffirmed the commitment to leverage, so that it returns to a level of 1 to 2 times, from the current 2.2 times following the acquisitions made by the companies, and hopes to resume plans to go public, close a partnership or secure a financing opportunity to accelerate the cement operation.

The company maintained its guidance of investing R$ 4.4 billion in 2023, with larger investments in mining and reductions in other segments.

Ribeiro said the company will pursue sustainable growth with low debt, and in the future may once again consider organic expansion in the United States.

As for costs, the company expects stability in the first quarter (citing the US$ 3900 reported in 4Q22) and a possible reduction in these costs in the second quarter, and also expects improvements after slab acquisitions, said executive director Luis Fernando Martinez, responsible for the commercial and logistics areas of the steel, cement and special sales segments.

For Martinez, the outlook is positive. He cited the projection by Instituto Aço Brasil (IABr) of 1.5% to 2% growth this year, following the decline recorded in 2022. “So, if the positive outlook is confirmed, we will be able to raise prices.”

“In China, the projection is for 5% growth due to the reopening and the completion of construction projects that were sold but not finished. Today, Chinese steel has gone from US$ 530 to US$ 680. In the US, with full employment and Biden's infrastructure plan, the price has gone from US$ 691 to US$ 1200 today. Nothing but good news! Turkey will also need rebar to rebuild,” the director explained. “It is possible to raise prices by 7.5% to 10%; in long steel, premiums are negative. If demand grows in automotive, construction and home appliances, starting in April, we can raise prices by 10%,” he added.

He also said that steel shipments to the US are already at the permitted limit.

The company reported improvements in several operating indicators that resulted in adjusted EBITDA of R$ 1.8 billion, citing better sales performance for the year, benefiting from the resumption of commercial activity in China and better iron ore prices. The margin was 50.4%.

Source: Agência CMA

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