CSN & CMIN: MU and 3Q preview: Broad-Based Earnings Pressure

Citigroup updated its CSN and CSN Mineração (CMIN) models ahead of 3Q26 results and significantly cut near-term estimates. The revisions are driven mainly by weaker mining profitability on lower iron ore prices (~US$90/t) and elevated freight rates (Tubarão–Qingdao above US$40/t), with margins also under pressure in steel and cement amid softer pricing, higher input costs and slowing activity. We forecast CSN consolidated 3Q26 EBITDA of about R$1.8bn (-41% vs. prior) and CMIN EBITDA of R$407mn (-69%). Steel 3Q EBITDA is estimated at R$492mn with an 8.6% margin, while 2026 steel EBITDA is R$1.9bn, R$0.3bn below 2025; cement EBITDA is cut to R$1.68bn. Although the potential €550mn sale of SWT supports CSN's deleveraging, weak earnings and cash generation keep the trajectory challenging. We maintain Neutral ratings, raise CSN's target price to R$6 (from R$5), lower CMIN's to R$5 (from R$6), and hold negative 30-day short-term views on both.