Mexican steelmakers report losses

Mexican steel firms Minera Autlán and Grupo Simec slipped to net losses in 3Q15, with weaker steel prices weighing on the sector.

AUTLÁN

Ferroalloy and manganese producer Autlán reported a net loss of 16.1mn pesos (US$1mn), compared to net earnings of 35.9mn pesos in 3Q14.

Revenue dipped to 1.13bn pesos from 1.22bn, despite a 1% rise in ferroalloy volumes and 34% growth in the mining division, resulting from higher manganese nodule export volumes.

The cost of sales reached 941mn pesos, down from 975mn pesos, with general costs at 159mn pesos, up from 141mn pesos.

The steel sector is suffering from global surplus production, resulting in lower prices. A recent temporary 15% tariff on imports of five types of steel will help tackle dumping and have a positive impact on Mexico's steelmakers, the company said.

Weakening demand is also affecting manganese prices, with China the major consumer of the metal, it added.

SIMEC

Simec reported a net loss of 341mn pesos in the quarter, compared to net earnings of 352mn in 3Q14.

Revenue fell to 6.347bn pesos from 7.02bn pesos, with the cost of sales at 5.59bn pesos, down from 6.56bn pesos, while general costs increased to 329mn pesos from 271mn pesos.

Finance costs were 109mn pesos, compared to gains of 89mn pesos. Income tax was 758mn pesos, compared to income tax gains of 28.2mn pesos.

Steel sale volume increased 1% while the average realized price fell by about 4%.

Simec's parent company, Industrias CH, reported a net loss of 753mn pesos, compared to net earnings of 547mn pesos, with revenue at 7.21bn pesos, down from 8.10bn pesos, and the cost of sales at 6.30bn pesos, down from 7.40bn pesos. Steel sales totaled 617,000t, down from 658,000t.

Steel prices have averaged US$216.43/t so far in October, down from US$457.17/t in the same month of last year.