Usiminas says he suffers “unfair pressure” from steel imports and calls for fair competition

The measures adopted by the government last year to contain the import of steel products, following demands from the national industry, appear not to have been sufficient. At least for Usiminas (USIM5).

The company presented its 1Q24 results to market analysts this Tuesday (23) with many complaints about foreign steel, which continues to arrive in the country in large quantities. According to Usiminas, the import volume is even greater than last year.

“2024 started with a challenging scenario, with strong pressure from imports with unfair conditions, in addition to a forecast of moderate economic growth in Brazil”, said Marcelo Chara, CEO of Usiminas, at the opening of the conference call.

Import increased

“We anticipate stable production during the 2nd quarter. The volume of steel imports in the 1st quarter was 18% higher than in the previous year and attracts attention. Therefore, it is important for Brazil to implement measures to promote fair competition”, he added.

The steel company, which generates a third (1/3) of its revenue from the supply of flat steel for the automobile industry, sees the numbers presented by this sector at the beginning of the year as positive signs.

“But we observed an increase in vehicle imports compared to the same period last year”, highlighted Chara – the scenario tightens domestic steel consumption.

Favorable technical opinion

The executive commented on a favorable technical opinion from the Chamber of Foreign Commerce (Camex) on the damage caused by importing steel into the country. “For now, the concern is very high. But there is positive expectation, with this technical opinion, which shows an important degree of maturity to balance this type of absolutely unfair competition”, Chara told analysts.

Full stocks

Miguel Homes, Commercial VP at Usiminas, said in the presentation of the 1Q24 results that “not only the steel industry, but the chain is suffering from this important volume of imports under unfair conditions”.

According to him, “in many cases, with prices below cost”. Homes said that it is necessary to regularize the chain’s margins with a balance of stocks, but highlights that there is “a very high level of imported material in the market”.

Last year, blast furnace 1 at the Ipatinga plant (MG) was shut down due to market conditions.

Blast furnace 3 continues to stabilize

Regarding blast furnace 3, also at the Ipatinga unit, which was renovated last year and is in a stabilization period, Usiminas expects further efficiency gains and cost reductions.

“The cost of steel production continues to reduce with the stabilization of blast furnace 3”, assured Thiago Rodrigues, CFO of Usiminas. But on the other hand, he expressed concern about the plates that are laminated at the Cubatão (SP) unit. They are purchased on the market and have followed an upward trend in price.

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“We bought a sign from the market (for Cubatão). Negotiations are carried out in dollars and the devaluation of the exchange rate has an impact,” he says. It should be noted that 1/3 of Usiminas’ steel sales originate from the Cubatão unit – the rest from the Ipatinga plant.

The CFO explained that despite the drop in production costs in Ipatinga, the increase in the price of slab to supply Cubatão establishes stable conditions in this item in 2Q24.

Smaller ore volume

As for the mining unit, which is located in Itatiaiuçu (MG), Usiminas reported that the production volume forecast for the year is lower than last year, influenced by the stoppage of the mining unit and the entry into operation of new iron ore exploration fronts only in the second half.