CSN Leads Steelmaker Tumble on Metals Decline: Sao Paulo MoverDenyse Godoy
Brazilian steelmakers led by Cia. Siderurgica Nacional SA slumped after a drop in metals prices dimmed the outlook for the companies’ revenue this year.
CSN, as Brazil’s second-biggest steelmaker in known, fell 1.9 percent to 12.42 reais at 12:24 p.m. in Sao Paulo, extending a four-day drop to 10 percent, the biggest since July. Usinas Siderurgicas de Minas Gerais SA lost 0.8 percent to 12.65 reais. The Bloomberg Base Metals 3-Month Price Commodity Index retreated as much as 0.6 percent.
Steelmakers may not be able to increase the price of their products for local customers as costs on the international market decline, according to Victor Penna, an analyst at Banco do Brasil SA.
“Brazilian steel producers sell more in the domestic market, but may face rising competition with imported goods if prices abroad decline,” Penna said in a phone interview from Sao Paulo. “After huge gains at the end of last year, investors may not see room for additional advances in this scenario.”
Sao Paulo-based CSN jumped 52 percent in the fourth quarter, while Belo Horizonte, Brazil-based Usiminas, the country’s third-biggest steelmaker by market value, rallied 35 percent. The Ibovespa declined 1.6 percent during the period.
Brazilian steel producers increased the prices of the products they sell to automakers by 12 percent this month after a raise of 6 percent to 8 percent for other companies at the beginning of the last quarter of 2013, according to Penna.
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