Usiminas Advances Most Since 2008 on Import Tax Boost
Usinas Siderurgicas de Minas Gerais SA, Brazil’s second-largest steelmaker, jumped the most in almost four years after Latin America’s biggest economy boosted import taxes on some products including steel.
Usiminas, as the Belo Horizonte, Brazil-based company is known, gained 18 percent to 9.52 reais at the close in Sao Paulo, the biggest increase since Sept. 19, 2008. Gerdau SA (GGBR4), the largest Brazilian steelmaker, and Cia. Siderurgica Nacional SA, the country’s third-biggest, also rose.
Brazil raised the import tariff on some flat and long-steel products to 25 percent from 10 percent to boost the domestic steel industry, the country’s trade ministry said yesterday in a statement. The measure benefits Usiminas the most because it’s the steelmaker with the highest import exposure, Marcos Assumpcao and Andre Pinheiro, analysts for Banco Itau BBA SA, said in an note today.
“Brazilian companies will benefit from higher realized domestic prices in the short term,” wrote the analysts, who upgraded the stock to the equivalent of neutral. “Sixty percent of Usiminas’ revenues are exposed to the announced increase in import tariff, while CSN and Gerdau’s exposures are smaller, 30 percent and 5 percent, respectively.”
CSN rose 8.2 percent to 10.34 reais, the biggest climb since August 2011. Gerdau increased 2.6 percent to 18.28 reais.
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