Cia Siderurgica Nacional SA said that the price of Brazilian iron ore will probably fall by 20% in annual contract agreements this year. Mr Jayme Nicolato mining director of CSN said that prices for iron ore from other countries may fall 30%.

He added that prices for ore produced by miners abroad including BHP Billiton Plc and Rio Tinto Group will fall more than prices for Brazilian ore, offsetting the bigger price gain these companies achieved last year.

Mr Nicolato said that "It will be difficult to reach an accord on a price fall of more than 30%. An accentuated fall is also foreseen in prices of other steelmaking raw materials including coal."

He said that CSN is proceeding at full speed with plans to expand its Casa de Pedra iron ore mine in Brazil's Minas Gerais state to 24 million tonnes in 2009 and 45 million tonnes a year from 2010, from 18.8 million tonnes in 2008.

Mr Otavio Lazcano CEO of CSN said that iron ore represented 22% of CSN's operational revenue in the fourth quarter, up from 16% the previous year. CSN does not expect steel prices to drop more this year either in Brazil or abroad. He added that "There are already signs of improving demand."

(Sourced from www.bloomberg.com)