Industry consultants said that some new steel mills planned in Brazil won't emerge due to coal supply difficulties.
Mr Luiz Sarcinelli director of Sage Consultoria at a coal conference in Rio de Janeiro said that companies including Vale SA, ArcelorMittal, Techint and Wuhan Iron and Steel Co plan to add a total of 19.2 million tonnes 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.
Mr Sarcinelli said that "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.”
Mr Otacilio Pecanha of Negotiare Consultoria said that “Coking coal demand in Brazil is set to double in four to five years, with the new projects adding an extra 23.6 million tonnes of demand. At the same time, coking coal prices will continue rising on China led demand, which has already prompted a six fold increase over the last decade to about USD 330 a tonne recently.”
He said that prospects for some new Brazil steel projects look doubtful in this scenario. 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.(sourced from Dow Jones Newswires)