October 08, 2008

Brazil steelmakers working at full capacity- CSN

Dow Jones reported Brazilian steel producers are working at close to capacity and the companies need to react to the new pace of growth in the local economy.

Mr Benjamin Steinbruch CEO of CSN during a conference call said that "Brazil is not used to growth, but I am optimistic about the steel market.” He said that the second quarter could be the strongest in CSN's history as the company has all the raw materials bought at old prices, while it will be selling at new, higher iron ore and steel prices.

CSN, in March 2008 raised its hot rolled steel price by 13.5% and was due to raise it by another 8.5% in May. However, Mr Steinbruch said that the price would now rise 15% on May 14, due to a major jump in coal prices. Meanwhile, iron ore delivery contracts were raised by 65% in April. It added that there may be further steel price hikes in July or August 2008.

He also said that CSN is selling a stake in mining company Namisa in order to clear CSN's debts. However, the company is only cleaning the slate ahead of a new wave of investments in the near future.

Mr Steinbruch said that CSN has been approached by a number of steel firms in China and the Middle East to form a joint venture for the creation of a pellet plant in those regions and we are assessing offers and doing the numbers.