Usinas Siderurgicas de Minas Gerais SA, the Brazilian steelmaker that had losses in three of the past six quarters, soared to the highest in almost three months as Deutsche Bank AG said it expects an increase in flat-steel prices.
Usiminas, as the Belo Horizonte, Brazil-based company is known, gained 6.1 percent to close at 8.64 reais in Sao Paulo, the highest since May 30. The company’s voting shares, a less- traded type of stock, climbed 6.2 percent, the second-biggest gainer in the Brazilian benchmark Bovespa index.
Brazilian producers of flat steel, used in cars and home appliances, are likely to announce a price increase of as much as 8 percent in the coming weeks, Deutsche Bank analysts Rodrigo Barros and Leandro Cappa said in a note to customers today. The price boost may be “a short-term catalyst” for Usiminas and Cia. Siderurgica Nacional SA, another Brazilian flat-steel producer, they said.
“We believe that higher steel prices in Brazil could be a positive event for the local steelmakers in the short run,” the Sao Paulo-based analysts said. “Investors must be aware that further price increases seem unlikely in light of low export prices from Asia.”
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