Usiminas, Brazil's second-largest steelmaker, has reported that its third quarter 2009 financial results exceeded analysts' expectations, due largely to an increase in production in response to a rebound in domesticsteel demand.
Usiminas' net income totaled 454 million reais, or US$262 million, in the quarter, down 23 percent from a year ago, with an 11.5 percent drop in sales volumes, year-over-year. However, Usiminas' profit topped analysts' Q3 expectations which averaged about 400 million reais.
During the third quarter, Usiminas restarted two of three idled blast furnaces in order to meet rising domestic demand. Domestic sales accounted for 67 percent of the company's shipments of 1.7 million mt in the quarter. The firm expects to achieve up to 85 percent production capacity utilization by year-end and anticipates domestic demand could grow as much as 20 percent next year, according to comments made by CEO Marco Antonio Castello Branco during the company's Q3 earnings conference call.
Despite the up-tick in overall domestic demand, the steelmaker does not expect to restart its remaining idled blast furnace until at least mid-2010, according to Branco, who cited the continued lackluster domestic demand for thick steel plate. Branco said Usiminas does not expect a recovery in domestic demand for thick steel plate until 2011. Brazil's largest consumer of thick steel plate is the state-run oil company, Petrobras.