CSN’s Loss Widens to US$143 Million as Cheap Chinese Steel and Debt Bite

Brazil · Business

The steelmaker still earned R$2 billion at the operating level. Yet a mountain of debt and a flood of imported steel turned that into a bottom-line loss.

CSN, one of Brazil’s biggest steelmakers. Slid to a net loss of R$773 million (about US$150 million) in the second quarter of 2026.

That is nearly six times the R$130 million it lost a year earlier. And it puts a spotlight on the company’s steel business and its heavy debts.

What CSN reported

CSN reported a net loss of R$773 million, about US$143 million, for the second quarter of 2026. A year earlier it lost R$130 million, so the red ink is now nearly six times as deep.

The loss was also wider than the R$555 million, about US$103 million, that the company lost in the first quarter. The company’s own release points the other way on steel: it says protective measures cut imported material, lifting domestic volumes and prices and returning steel margins to double digits at 10.5%. The loss came from the financial result, at negative R$1.84 billion, and from the absence of the contingency reversals that flattered the same quarter last year.

How a R$2 billion profit became a loss

Here is the puzzle: the business made money running its plants, yet still ended in the red. Its adjusted EBITDA, a rough measure of cash profit from operations, came to R$2.0 billion, about US$370 million.

EBITDA leaves out interest and a few other items, so it flatters the picture when a company owes a lot. The gap opened lower down the accounts, where interest on the company’s debt swallowed that profit and more.

The trouble with cheap Chinese steel

China makes far more steel than it uses at home, and the surplus flows abroad at low prices. In Brazil, that cheaper imported steel undercuts CSN and forces it to hold its own prices down.

Steelmakers here have long asked the government for stronger barriers against the imports, so far with limited success. Steel profitability actually improved this quarter, with the segment margin back into double digits.

When mining stops carrying the load

CSN is not only a steelmaker; it also runs a large iron ore mining arm, listed separately as CSN Mineracao. In good times, mining profits cushion a weak steel market and usually do the heavy lifting.

This quarter the mining unit was held back by a stronger real, higher freight and a 15-day maintenance stoppage rather than by ore prices, so that cushion was thinner than usual. The mining arm still made money, but not enough to offset the weak steel unit and the interest bill.

The weight of the debt

The bigger drag sits in the company’s borrowings, which top R$40 billion, more than US$7.5 billion. Servicing that debt costs a great deal in interest every quarter, and those costs turned the result into a loss.

CSN is now working to push back when some of its debts fall due, buying itself more breathing room. It has also won support from some lenders for a debt swap, easing the immediate squeeze on its cash.

What CSN actually does

CSN, short for Companhia Siderurgica Nacional, is one of Brazil’s oldest and largest steel producers. It was founded in the 1940s and long ran the country’s flagship steel mill in Volta Redonda.

It makes flat steel for cars, appliances and construction, and it also mines iron ore and makes cement. That mix means its results swing with both the steel market and the price of iron ore.

Reading the operating numbers

Net revenue for the quarter was R$10.2 billion, about US$1.89 billion. The adjusted EBITDA margin was 19.6%, so the company kept roughly a fifth of its sales as operating cash profit.

A margin near a quarter is solid for a heavy industry like steel and mining. The plants are still generating cash; the problem lies in what the debt then takes away.

The pressure from credit raters

The strain has not gone unnoticed by the agencies that grade company debt. CSN has faced downgrades tied to its borrowings and to how much cash it is burning.

A lower grade tends to make new borrowing more expensive, which can deepen the very problem it flags. To ease the pressure, the company has floated selling some assets and reworking its loans.

What it means for shareholders

For anyone holding the shares, the main worry is not the factories. The core operation still earns money; the debt is what turns that into a loss.

Until the borrowings shrink, results are likely to stay under pressure even in a steadier steel market.

What to watch next

Three things will shape the coming quarters for the company. Watch the flow of Chinese steel imports, the price of iron ore, and progress on cutting the debt.

If iron ore firms up and the debt plan works, the losses could narrow quickly.

Frequently Asked Questions

How much did CSN lose in Q2 2026?

CSN reported a net loss of R$773 million (about US$150 million), nearly six times the R$130 million loss a year earlier.

Why did CSN post a loss if EBITDA was positive?

The operating business earned about R$2.0 billion in adjusted EBITDA. But interest on the company’s large debt swallowed that profit and pushed the bottom line into the red.

What is hurting CSN’s steel business?

Weak steel prices and a flood of cheaper Chinese imports into Brazil are squeezing what CSN can charge, thinning its margins.

What does CSN do?

CSN, or Companhia Siderurgica Nacional, is a major Brazilian company that makes steel, mines iron ore and produces cement.

Sources:

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