July 3 (Bloomberg) -- Usinas Siderurgicas de Minas Gerais SA, the second worst-performer in Brazil’s main stock index this year, surged on a report that the steelmaker is raising prices, easing concern that demand from the auto industry is shrinking.
Preferred shares of Usiminas, as the Belo Horizonte, Brazil-based company is known, jumped 8.8 percent to 6.80 reais at 4:41 p.m. in Sao Paulo, the biggest rise since August 12. The preferred stock has lost 33 percent this year while the common stock has tumbled 53 percent. The Bovespa index is down 1.8 percent over the same period.
Brazil’s second-largest steelmaker by output is increasing prices for most products by 5 percent to 7 percent, Reuters reported today, citing two people familiar with the matter that it didn’t identify. Usiminas declined to comment when contacted by Bloomberg.
“The share has suffered a lot, losses were very strong in the first half and they also had poor earnings so news like this is enough for them to rebound,” Aloisio Lemos, an analyst at brokerage Agora Corretora, said by telephone from Rio de Janeiro. “The rise is linked to the strong previous drop.”
Usiminas led gains by commodity producers in Brazil as global raw material prices reached a five-week high on speculation that central banks in the U.S., Europe and China will ease monetary policy to spur their economies, boosting demand for raw materials.
The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 3.4 percent to 617.52 and earlier reached 618.42, the highest since May 25. Crude oil surged as much as 5.1 percent, and industrial metals including aluminum jumped.
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