Heat Treat Industry News
July 23, 2010
Vale, steelmakers rise on Chinese demand outlook
Vale SA led gains among raw-materials producers in Sao Paulo trading on speculation that China, the world’s fastest expanding major economy, will ease measures to curb domestic growth.
Vale, the world’s largest producer of iron ore, climbed 6.2% to BR40.90, the most since May 27, as of the close of trading at 4 pm New York time. Cia Siderurgica Nacional SA, Brazil’s third-biggest steelmaker, rose 5.3% to BR27.63, also the biggest gain in almost two months. Gerdau SA, Brazil’s biggest steelmaker, and No2 producer Usinas Siderurgicas de Minas Gerais SA also gained.
Stocks rallied after International Strategy & Investment Group and Morgan Stanley said China may loosen measures to curb overheating as the economy slows. Chinese investors may see a “visible softening” in the government’s policy tone in the third quarter, according to Morgan Stanley. China is the biggest consumer of iron ore, the main raw material used to make steel.
“The prospects of China loosening measures to curb overheating tell us iron-ore and steel demand are going to remain strong,” Fausto Gouveia, who helps manage BR200 million (US$112 million) in stocks at Legan Administracao de Recursos in Sao Paulo, said today in a telephone interview.
Bradespar SA, part of the group that controls Vale, jumped
6.7%, the most since Oct 29, to BR34.56.
Usiminas plans to raise steel prices by between 3.5% and 6% as of Aug 1 after iron ore, coal and other raw-material costs climbed, the company said today in an e-mailed statement after the close of regular trading.
Vale is producing iron ore at full capacity as Chinese-led demand rebounds, said Claudio Alves, the company’s director for iron-ore sales in the Americas. China is starting to rebuild steel stockpiles, while the US and Europe will likely increase inventories in the fourth quarter, Alves said today at an event in Rio de Janeiro.
Iron-ore prices are set to rebound this year, said Roger Downey, chief executive officer of MMX Mineracao & Metalicos SA. The iron-ore miner controlled by Brazilian billionaire Eike Batista is “ramping up” production and adding capacity, Downey said at the same event. MMX rose 3.6% to BR11.08.
http://www.mining-journal.com/
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