A recent failure at a Vale’s iron ore dam in Brumadinho, Minas Gerais state, has led to a reduced supply of iron ore and added pressure to Brazilian steelmakers’s costs, a Bank of America executive said on Thursday.
Antonio Heluany, vice president of equity research at Bank of America Merrill Lynch, said during the S&P Global Platts Steel Markets Latin America Conference that Brazilian steelmakers will likely increase steel prices due to Vale’s limited iron ore supplies.
Heluany estimated iron ore prices should reduce next year to about $64/mt CRF China, as supplies normalize. He said China should also increase iron ore production to between 8 to 20 million mt, amid a movement of deceleration of the nation’s economy.
“It indicates there will be an iron ore supply surplus,” Heluany said, adding that iron ore prices in Q4 this year may reach $70/mt CFR China.