CRU: Usiminas may reduce capex unless government strengthens protection

Chara highlighted Chinese flat rolled steel imports of 1 million tons in Q1, up 42% on the year-ago period.

Brazilian steel producers have been pressing for stronger protection measures, and is calling on the government’s trade authorities to review the import-quota system by May and impose anti-dumping tariffs on cold rolled steel imports by October.

Despite the challenges, Usiminas reported a net profit of BRL337 million in Q1, reversing a net loss of BRL117 million in the corresponding period of 2024, helped by turnover going up 10% to BRL6.85 billion. The company attributed the improvement to higher steel prices, especially auto steel, and lower costs in its steel division. Steel shipments went up 5% to 1.09 million tons.

Though expecting a stable performance in Q2, Usiminas warned of challenges ahead in the second half from high volumes of unfairly imported steel, an impact on domestic consumption caused by high interest rates, and uncertainties in international trade.

Though the company has limited exposure to the trade war sparked by US President Donald Trump’s tariff policies, chief financial official Thiago Rodrigues cautioned about potential trade diversion and a spike in imports of steel and manufactured goods as a result.