The Rising Influence of Rising Affluence

[DewDiligence]

This is good for CLF and other makers of coking coal, a necessary
ingredient to chemically reduce iron ore into elemental iron for
steelmaking.

http://www.advfn.com/nyse/StockNews.asp?stocknews=MT&article=48240786&headline=brazil-steelmakers-face-increasingly-difficult-coal-supply

›Brazil Steelmakers Face 'Increasingly Difficult' Coal Supply

By Diana Kinch
06/28/2011 20:16:39

RIO DE JANEIRO -(Dow Jones)- Some new steel mills planned in Brazil won't emerge due to coal supply difficulties, industry consultants said Tuesday. Companies including Vale SA (VALE), ArcelorMittal (MT), Techint and Wuhan Iron and Steel Co. plan to add a total of 19.2 million metric tons of extra steelmaking capacity in Brazil by 2016, but some projects probably won't move ahead due to increasingly scarce metallurgical--or coking--coal, a basic raw material, Luiz Sarcinelli, director of Sage Consultoria, said at a coal conference in Rio de Janeiro.

"The situation's getting increasingly difficult. Coking coal demand is growing most in countries that are deficient in this raw material: China, India and Brazil, where steelmaking is growing most," Sarcinelli said.

Coking coal demand in Brazil is set to double in four to five years, with the new projects adding an extra 23.6 million tons of demand, said Otacilio Pecanha of Negotiare Consultoria. At the same time, coking coal prices will continue rising on China-led demand, which has already prompted a sixfold increase over the last decade to about $330 a ton recently, Pecanha said.

Prospects for some new Brazil steel projects look "doubtful" in this scenario, he said. Projects related to miner Vale and the Acu port being developed by billionaire Eike Batista's EBX group may still receive the "push" needed to move forward, he said.‹