Usiminas sees no steel price increases in the near term

Despite a 2% carry-over on steel prices currently being negotiated with the local industrial sector, Brazilian steelmaker Usiminas (Bovespa: USIM5) sees no steel price increases in the near term.

"The current price scenario is about stability," finance VP Ronald Seckelmann said during a conference call to discuss the company's first quarter earnings.

"Issues like exchange parity and the large volume of steel imports being made ​​by companies in the country's northeast region are leading to large price differentials," Seckelmann said.

"On the other hand, in the southeast we have been suffering an impact coming from hedging of steel imports on the basis of an existing perception of a foreign exchange risk," the executive added.

During January, Usiminas announced an average 6% steel price increase for local steel distributors.

RESULTS

Usiminas recorded net income of 222mn reais (US$100mn) in the first quarter, compared to a net loss of 123mn reais in 1Q13.

Net revenues in Q1 decreased 1.66% to 3.142bn reais from 3.195bn, the company said in its latest earnings release.

Crude steel production remained stable at 1.66Mt, while sales volume dropped 9.68% to 1.44Mt.