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Estimated 3% rise in Chinese steel demand is part of economic cycle - Vale CFO

Bnamericas Published: Thursday, November 22, 2012
The forecasted 3% growth in Chinese steel demand for the next few years, considered a low figure by many analysts, is part of a natural economic cycle, Brazilian mining giant Vale's (NYSE: VALE) CFO Luciano Siani told BNamericas during a roundtable with executives from the China-Brazil Business Council seminar, held in São Paulo on November 21. "Growth at this level can be seen as low, but it is part of a natural cycle. In the early stages of an economic cycle, steel production grew at higher rates than the local GDP, but at the current stage this growth has been lower than the Chinese domestic product. We have been at a natural accommodation stage for some time now," Siani said. According to the CFO, the 3%/y growth scenario should apply for the next 5 to 10 years. "Also, many analysts are predicting that steel production in China will reach the 1Bt/y in the near future, but they do not know exactly when," the CFO said. China's current steel production is 720Mt/y, as previously reported. To meet China's steel demand, "Vale will seek every possible and profitable opportunity to increase production in all of its mineral commodities. That is, we are trying to do more with less. When we talk about the expansion of iron ore production, we plan to maintain all of our plans, and in relation to other mineral commodities we will seek partners trying to keep our production on schedule," the executive added. The full interview with Luciano Siani and other executives and politicians will be published in this week's Metals Perspectives, for subscribers only.

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