The share price of Brazilian flats producer Usiminas in the São Paulo Stocks Exchange, Bovespa, increased by 20 percent during February, the second highest increase in the month among the companies listed, surprising analysts, as the shares of steel producers in Brazil are not among those usually showing high variations of price.
Such analysts, many of which believe that the share price has room to increase further, mentioned a combination of factors leading to the increase.
The main factor is the net profit announced for 2023, equivalent to $300 million, which despite being 20 percent lower than in 2022, was considered as a good result given the challenging market conditions during the year.
Other factor was the restart of the revamped blast furnace number 3, that after a long stoppage and massive investments, is expected to increase productivity and reduce production costs in its new campaign.
The participation of Ternium in the administration of Usiminas was also mentioned as a positive factor, as the company has a significant record of achieving good results in the administration of steel producing companies.
Lastly, the analysts mentioned that Usiminas will benefit from declining raw materials prices, chiefly iron ore and coal.