A FEW WEEKS AGO Brazil's CVRD declared its intention to increase iron ore prices by a staggering 90 percent, leading to a number of raised eyebrows in the industry. However, following no doubt intense negotiations, this has now led to Japanese steelmakers agreeing to an increase of 71.5 percent. CVRD sells about 1 0 percent of its iron ore to Japanese steelmakers, while about 30 percent goes to Europe and 1 7 percent to China. A steel analyst commented, with a certain understatement, that the increase "is not a good outcome for the steel industry". The news initially caused steel sector shares in Japan to fall sharply, however, investors are a hardy bunch and, following positive economic news from Japan and South Korea, steelmakers and shipbuilding stocks were in demand as investors sought stocks geared to economic growth.
展开▼
