CSN foresees greater flat and coated steel market protection in Brazil by mid-2025

Brazilian steelmaker Companhia Siderurgica Nacional is working on various antidumping complaints against imports of flat steel products into Brazil, which continue to surge, company executives said Nov. 13.

The company expects these cases to be approved by the government with antidumping tariffs in place by May or June 2025, they said, speaking on a Q3 results call with analysts.

"We've already won 40% [antidumping] protection on tinplate and chrome coated sheets from China on a provisional basis; now we're preparing cases for all our other products," sales director Luis Fernando Martinez said on the call.

"The government has finally woken up, to help us," he said.

In June, Brazil's government put an import quota and tariff system into place on 15 steel products. Despite this, overall product imports into the country in 2024 are set to be even higher than last year's record 5 million mt due in part to greater imports of products not covered by the system and a marked recovery in domestic market demand.

Tinplate and chrome-coated sheets are typically used in packaging and CSN is Brazil's sole tinplate producer.

Complaints by CSN on imports of prepainted and zinc galvanized steels, as well as other hot rolled and cold rolled flat products are now being prepared or are already under investigation, according to Martinez.

The bulk of imports into Brazil come from China, where local steel demand has fallen both last year and this, amid a crisis in the real-estate sector.

Martinez said import penetration for galvanized and prepainted product types has hit as high as 23%, with many products entering Brazil below market prices.

"What's arriving in Brazil is equivalent to two times CSN's capacity of prepainted steel," Martinez said. Imports of prepainted and galvanized products should reach 3.5 million mt this year, he said.

Dumping margins are expected to be higher in the case of prepainted steel than were found for tinplate and chrome-coated steels, he added.

'Dynamic' domestic market

Still, the executives said CSN is optimistic on the currently "dynamic" steel market prospects in Brazil, where increased industrial activity has boosted overall demand, despite slightly lower sales prices than a year ago.

CSN reported Q3 steel product sales of 1.17 million mt, up 14.5% of the year, on an improved product mix and lower slab costs, with a marked 16% increase in domestic market sales, while exports remained stable.

The company now also has "a more positive vision" of what is likely to happen in China, with the Chinese automotive and white goods sectors showing improvement.

Donald Trump's election as next US president has also pushed the market generally into buying mode before any new tariffs are introduced, and this could result in a price upturn, according to Martinez.

Potentially higher US import tariffs next year may also be expected to push prices for products including hot rolled coil higher, including in Brazil, the sales director said.

Brazil's domestic market price premiums over imported steel are currently low, at around 6-8%, but may return next year to traditional levels of 15-25%, he said.

Iron ore performance

CSN CEO Benjamin Steinbruch said the company's mining arm, CSN Mineracao, had had an "altogether positive" Q3.

Measures are expected from China on the housing market that may improve the international market outlook for iron ore, auguring well for CSN's Q4 performance, Steinbruch said.

Sales stood at a record 11.88 million mt in Q3, up 2.1% on the year. The mining arm sells everything it produces, he added.

Although 62% Fe prices had dipped as low as $89/mt during Q3, Steinbruch noted that with the company's reductions in its C1 iron ore cost, "CSN is ready for market price oscillations."

CSN Mineracao's C1 cash cost fell to $19.2/mt in Q3, lower than the guidance of $21-$23/mt and with an average of $21/mt foreseen for the long term.

The CEO foresees iron ore prices continuing for the time being in the $100-$120/mt range.

"It would be difficult for prices to stick below $100/mt because that would make it difficult to keep higher-cost mines open," he said.

CFO Marco Rabello noted CSN is now investing in construction of the P15 expansion at its main Casa de Pedra mine, which will boost the company's availability of higher-value ores. P15 includes a 16.5 million mt pellet feed plant.