Usiminas must apply the same conditions in negotiations with vehicle makers for April that it used to define the 60% to 70% readjustment in steel prices that were valid for the January contracts, said the steelmaker’s commercial director, Miguel Homes, on this Friday (11).
The company sets annual contracts with companies in two periods, one in January and another at the beginning of the second quarter.
According to the executive, the January contracts correspond to about 20% of the volume of steel sold by the steelmaker to the automotive sector and those in April are the remainder. Typically, one third of Usiminas’ production is directed to the automotive sector.
“We have already started the April negotiations and they should follow the January negotiations because the scenario is very similar”, said the executive during a conference with analysts and investors.
Homes also said that Usiminas raised prices to distributors from February onwards and that he expects the volume of steel imports by the country to fall in the coming months, after strong expansion in 2021.
According to him, despite the increase in February, the price of domestic steel is at the same level as that practiced in the international market. In general, the product for the domestic market has a premium built in.
The company earlier released record fourth-quarter results, but the company’s shares fell 5.3% at 1:50 pm, while the Ibovespa showed appreciation of 1.16%.
Usiminas’ financial vice president, Alberto Ono, said that despite the 7 billion reais in cash and the net debt position of 720 million, the company will not change its policy of paying a dividend of 25% on profit, the mandatory minimum. .
According to him, Usiminas intends to maintain its robust position while preparing a stop for the general renovation of blast furnace 3 at the Ipatinga plant, which will require billion-dollar investment in equipment and in the formation of slab inventories. The resources must come from the company’s own cash generation, he explained.
In addition, the executive stated that the company should face in the second quarter an increase in coal costs, one of the main components of steel production.
On a possible new galvanizing line by Usiminas, Ono stressed that the company is still studying the project, despite the fact that galvanized steel is one of the most imported products in the sector across the country.
On the iron ore front, Mineração Usiminas president Carlos Rezzonico said first-quarter production is likely to fall due to heavy rains in Minas Gerais in January. The river season caused a production loss of 200,000 tonnes of iron ore in January, he said.
Source: CNN Brasil
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