Aluminum, steel most exposed metals to Trump tariffs, Citi says
A 25% tariff as announced by Trump on Monday would likely cause steel prices to rise by $100 to $150 a short ton, the analysts said.
Brazilian steelmaker Usiminas on Wednesday reported first-quarter net income in line with market expectations, but the bottom line figure fell 49% from the previous three months as mining operations decelerated.
Heavy rainfall hampered mining and operational logistics in the period, with non-recurring financial effects also contributing to the quarterly drop, Usiminas said.
After the report, shares in the company dropped about 5% to 12.45 reais, making it one of the top losers on Brazil’s Bovespa stock index, which was down 0.6%.
Usiminas’ iron ore sales fell 38% from the previous quarter and 17% year on year to 1.6 million tonnes. Steel sales rose by 7% from the previous three months but were down 10% year on year at 1.13 million tonnes.
First-quarter net income was up 5% year on year at 1.26 billion reais ($270 million) on net revenue of 7.85 billion reais.
Analysts at BTG Pactual viewed the quarterly figures as soft overall, noting that realized prices were lower-than-expected both at the mining and steel units, and said the company still has a lot of work ahead.
“We continue to see value on Usiminas, but recognize the pressure stemming from rising costs and poor demand in the domestic market…should continue to weigh on stock performance,” they said.
In a separate securities filing on Wednesday, the company said it expects its second-quarter steel sales to be between 950,000 tonnes and 1.05 million tonnes, down from 1.3 million tonnes a year earlier.
Usiminas has also delayed the timeframe for concluding repair works on its Ipatinga blast furnace #2 by two months, to June from April. The furnace has been out of service since October.
($1 = 4.6658 reais)
(By Gabriel Araujo; Editing by David Goodman and Kirsten Donovan)
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