Brazilian steel producer Usiminas’ short steel sales were attributed to lower demand from the automotive sector, which is still recovering from the COVID-19 pandemic.
Brazil’s auto association, Anfavea, estimates that auto production will slip by 35pc in 2020 over 2019. Brazil produced 1.3mn vehicles in September 2020, down 41pc compared to a year ago. However, auto production is expected to rebound in the last two months of 2020. With expected demand recovery, the company restarted production at its Ipatinga facility in Q3 2020 that was idled in Q2. This plant is capable of producing 5mn mt of steel per year.
Usiminas’ steel sales volume declined by 16pc to 2.6mn mt in the first nine months of 2020, against 3.1mnt mt in the prior-year period. Iron Ore sales in January-September rose 5pc on an annual basis to 6.4mn mt. Domestic sales reduced by 12pc in the first nine months of 2020, with exports on the rise. During Q3 2020, steel sales declined by 10pc to 934,000mt against the same period a year ago. Iron ore sales fell by 7pc over Q3 2019 to 2.3mn mt.
Net revenue fell by 4pc to BRL10.6bn ($1.8bn) in January-September 2020 against the prior year. Adjusted EBITDA increased by 5pc to RB1.6bn during this period. For Q3 2020, revenue jumped 14pc over Q3 2019 to RB4.4bn while adjusted EBITDA rose by 87pc to RB826mn.