CSN's Steel Recovery and Asset Sales Define a Pivotal Quarter
Antidumping benefits, record cement, and deleveraging progress highlight Q2 2026
CSNA3.SA · Earnings Call · 2026-08-13
Steel's Turning Point: From Imports to Double-Digit Margins
The second quarter of 2026 marked a clear inflection for CSN's steel division. After years of battling illegal imports and margin compression, the company finally saw the first tangible benefits of antidumping measures. Luis Martinez, the steel segment executive, was emphatic about the structural shift: “We're going to try to fight against these imports in any way possible.” — Luis Martinez, Steel Segment Executive · 2026-08-13 The results speak for themselves — with domestic market sales growing 10% and profitability back to double digits. As Marco Rabello noted in the prepared remarks, “the company was able to overcome all the adversities relating to costs and raw materials to offer vigorous growth of EBITDA” — Antonio Marco Rabello, Executive Director of Finances · 2026-08-13. The improvement is not just a blip; management is guiding toward 15–17% margins in the second half, underpinned by further price adjustments and a continued shift from imported to domestic production. This is a far cry from the frustration expressed in prior calls, when the company lamented the lack of political will to protect local industry. “We need a presidential action signaling how the industry will be treated going forward.” — Benjamin Steinbruch, Chairman · 2025-08-01 Now, with binding offers for cement on the table and antidumping measures finally being implemented, the tone has shifted from desperation to confidence.Diversified Assets: Cement, Logistics, and Energy Everywhere
The quarter reinforced the value of CSN's diversification. Cement market delivered a second consecutive EBITDA record, with margins above 30% despite scheduled maintenance. The logistics segment posted its second-best EBITDA ever, thanks to a dry period and strong cargo volumes. Energy benefited from a retroactive revenue recognition at the Jacuí hydroelectric plant. More importantly, the company is actively monetizing its non-core and even core assets to deleverage. The binding offers for the cement unit and the upcoming nonbinding proposals for a minority stake in logistics are progressing faster than expected. Marco Rabello commented on the cement sale process: “We think we will have the valuation that it deserves to carry out this operation that will be very important for the group's deleveraging.” — Antonio Marco Rabello, Executive Director of Finances · 2026-08-13 This is a stark contrast to the previous year, when the company was still fighting for basic market share. The new cash generation from working capital release and operational improvements is giving the company breathing room, but the asset sales are the real game-changers.Deleveraging: From Survival Mode to Strategic Control
The company's capital structure is being reshaped. The successful 2030 bond issuance (with 77% subscription) and the repurchase of a portion of 2026/2028 bonds indicate a proactive approach to liability management. The bridge loan remains largely undrawn, and the company is rolling bank debt smoothly. As Benjamin Steinbruch noted in the prepared remarks,The company's focus on reducing working capital — from BRL 3 billion to a target of BRL 1 billion — is already yielding results, with an additional BRL 1 billion release expected by year-end. Release of working capital has been a recurring theme, but now it is translating into actual free cash flow positive quarters. The path ahead is clear: continue to improve operational results, execute the cement and logistics sales, and reduce the cost of debt. The market has taken notice — the stock is up meaningfully from its lows, and the recent capital market operations signal renewed confidence. This quarter represents a genuine pivot for CSN. The steel recovery is real, driven by antidumping and a disciplined commercial strategy. The asset sales are no longer hypothetical; they are in advanced stages. And the company is demonstrating that it can generate cash even in a challenging environment. While risks remain — iron ore price volatility, geopolitical effects on freight, and the lingering threat of circumvention of antidumping measures — the trajectory is undeniably positive. “We're very satisfied to announce the conclusion of the new 2030 bond with a leverage of more than 77%.” — Antonio Marco Rabello, Executive Director of Finances · 2026-08-13 This confidence is well-founded.We were very successful in the change complying to the request of our creditors to show this movement of part of our debt, rolling the rest of the debt.