Breaking News

Verizon First-Quarter Pro Forma Earnings 91c, vs. Estimate for 87c
Tweet TWEET

Usiminas to Boost Brazil Steel Prices Up to 12%, Santander Says

Usinas Siderurgicas de Minas Gerais SA, the Brazilian steelmaker that posted losses in every quarter of 2012, is boosting steel prices for distributors by as much as 12 percent next month, Banco Santander SA said.

Usiminas, as the Belo Horizonte, Brazil-based company is known, is set to raise prices for some steel products by between 6 percent and 12 percent, Santander analysts Felipe Reis and Alex Sciacio said in a note to clients dated today. The increase may boost the company’s earnings before interest, taxes, depreciation and amortization this year by about 85 million reais ($42.9 million), they said.

“We have confirmed with steel distributors that Usiminas is increasing prices to distribution clients,” the analysts wrote in the report. “We view this news favorably.”

Usiminas’ press office didn’t immediately reply to an e- mail today seeking confirmation of the increase.

Usiminas posted Feb. 18 a fourth-quarter net loss of 323.8 million reais, more than twice the loss estimated by analysts, as costs of products sold rose faster than sales.

Usiminas, which boosted steel prices to distributors by an average 5 percent in January, is working to extend the increases to its industrial customers by April, Sergio Leite, the company’s commercial vice president, said Feb. 19 during an earnings conference call. That would be the second price increase for clients since July, he said at the time.

Usiminas rose 6.8 percent to 9.87 reais in Sao Paulo yesterday, the most since Dec. 18 and the first increase in seven trading days.

To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.