Iron ore majors ramp up supply even as China faces challenges
Iron ore is one of the year’s worst performing major commodities, slumping by almost a quarter as China’s property crisis drags on.
Brazil’s Usiminas said on Friday it had recognized an impairment loss of 1.7 billion reais ($321.29 million) related to the value of its steelmaking assets, heavily affecting fourth-quarter results.
The steelmaker reported a total negative effect of 1.4 billion reais from impairment moves in the quarter, with the scrapping of a previous 293 million-real impairment related to mining assets partially offseting the fresh losses.
Usiminas in the fourth quarter posted a net loss of 839 million reais, it said in a securities filing, reversing the 2.49 billion-real net profit reported a year ago as steel and iron ore sales fell by nearly 10% each.
Net revenue and operating margins also slipped.
The company in a separate statement provided fresh forecasts for this year, saying it expects capital expenditure to reach 3.2 billion reais in the period, up 46.5% from 2022.
Steel sales are seen between 950,000 and 1.05 million tonnes in the first quarter, versus 963,000 tonnes in the previous three-month period, while iron ore sales are set to reach 8.5 million to 9.0 million tonnes in the full year.
In 2022, Usiminas sold 8.64 million tonnes of iron ore.
($1 = 5.2911 reais)
(By Gabriel Araujo; Editing by Steven Grattan)
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