STXNEWS LATAM-BofA says outlook for Brazil steel remains grim

Fri Jun 3, 2011 4:12pm GMT

Sentiment among Brazilian steelmakers is negative, as the industry struggles with a stronger currency, surging raw materials costs and high imports, analysts at Bank of America Merrill Lynch said on Friday. Brazil has become a country where production is getting costlier, the analysts said.

"The steel sector's biggest challenge will then be to reduce costs, as prices are now closely following international benchmarks, and fight imports," the report said. The analysts noted that shares of Usiminas (USIM3.SA: Quote)(USIM5.SA: Quote) will continue underperforming despite their year-to-date tumble. sourced Reuters