CSN Mineração Q2 Profit Rises on FX Shift as Mining Earnings Fall

CSN Mineração reported second-quarter net income of R$219.3 million, an 89% increase from the same period last year. The headline figure, however, obscures a fundamental contraction in the actual mining business. During the same stretch, net revenue fell 15.8% to R$2.867 billion, and adjusted EBITDA dropped 19.7% to R$1.018 billion.

The profit surge was driven almost entirely by accounting mechanics rather than operational improvement. Because the Brazilian iron-ore producer sells its output in dollars but reports in reais, its bottom line is highly sensitive to currency fluctuations. A 34.5% reduction in the currency drag on its dollar-denominated cash and debt lifted the financial result, narrowing the net financial loss to R$491 million.

This FX-driven uplift also benefited from an artificially low baseline. In the second quarter of 2025, net income had already slumped to just R$115.8 million. Growing 89% off that subdued base produces a dramatic percentage jump, even though the absolute profit of roughly US$41 million remains thin for an operation of this scale.

Stripping out the financial line reveals a tougher operating environment for the steelmaker's mining arm. Sales volumes were effectively flat at 11.849 million tonnes, up a mere 0.1% year over year. The double-digit drops in revenue and EBITDA therefore stem entirely from lower global iron ore prices, rather than a lack of production.

That pricing weakness traces directly back to China. As Chinese construction activity and steel mill output cool, global demand for the commodity softens, easing prices for every major exporter. CSN Mineração is fully exposed to this macroeconomic swing.

For investors, the quarter highlights why the company's reported net income can be a misleading metric. The EBITDA margin of 35.5% remains healthy for the sector but is clearly down from prior peaks. Market