CSN sees room for Brazil to negotiate steel quotas with US

SAO PAULO, March 13 (Reuters) - Brazilian steelmaker CSN CSNA3.SA sees room for Brazil to negotiate a quota mechanism with the United States in the coming months, an executive said on Thursday, after U.S. President Donald Trump put tariffs on steel and aluminum imports.

Brazil, one of the largest sources of U.S. steel imports, has decided to seek dialogue with the Trump administration and not immediately retaliate against what it called "unjustifiable" tariffs.

Trump's 25% duties on all steel and aluminum imports took effect on Wednesday, stepping up a campaign to reorder global trade in favor of the U.S. and drawing swift retaliation from Canada and Europe.

"From what we've been hearing, I believe that in the next two months it is possible for a negotiation like the one we had in 2018 to be opened. Perhaps a quota system," CSN's commercial head Luis Fernando Martinez told analysts on an earnings call.

Trump, who took office in January for his second term, first targeted steel and aluminum for tariffs in 2018, but later granted several countries exemptions and struck duty-free quota deals for Brazil based on pre-tariff volumes.

The South American country had previously suggested quotas as a "smart mechanism." Martinez noted the U.S. remains a net importer of several steel products, including plates and sheets.

EARNINGS BEAT

CSN, one of Brazil's largest steelmakers and miners, reported a fourth-quarter net loss of 85 million reais ($14.66 million) related to what it called "still high financial expenses," but saw core earnings exceed market expectations.

The company posted 3.33 billion reais in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), down 8% year-on-year but beating analysts' expectations of 2.87 billion reais, based on an LSEG poll.

Net revenue totaled 12.03 billion reais, while analysts projected 11.8 billion reais.

Sao Paulo-traded shares of the company jumped more than 7.5%, while mining division CSN Mineracao CMIN3.SA soared around 10%. Both were among the top gainers on Brazil's Bovespa stock index .BVSP, which rose 1.3%.

Analysts at JPMorgan said both CSN and CSN Mineracao exceeded their forecasts for the quarter on better-than-expected costs, striking a positive outlook. "An upward revision of consensus estimates is expected," they said.

($1 = 5.7989 reais)