BNamericas quoted Mr Julian Eguren CEO of Usiminas as saying that the Brazilian steel industry is experiencing a paradigm shift.

He added that "Currently, a steel company should have its own iron ore production as a precondition for competitiveness."

According to the executive, the steel industry is still adapting to changes in the iron ore pricing system, which in 2010 moved from the annual benchmark pricing to a quarterly system and subsequently to a spot market. He said that "It's been hard to predict market behavior."

Usiminas finance VP Mr Ronald Seckelmann said the steelmaker has resources to finance its mining projects and is not working to increase capital in 2012, although the cash flow environment has been under pressure in recent quarters. He added that "Usiminas' mining projects already have enough resources."

Mr Seckelmann's comments come in response to reports saying that Usiminas is preparing an operation of at least BRL 1.5 billion to increase its capital and may also sell assets to leverage investments due to the company's weak operating cash flow.

Source - Business News Americas

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