LONDON (Reuters) - Brazil’s Vale, the world’s largest iron ore miner, said on Thursday a recent dip in global steel prices is temporary due to overproduction in China ahead of winter output cuts.
Vale Chief Executive Fabio Schvartsman told investors in London that global capacity utilization in the steel sector has risen to 76 percent this year from 73 percent last year, indicating excess capacity in the sector is shrinking, giving steelmakers pricing power.
He said capacity utilization in China’s steel sector is at 85 percent, indicating a healthy market poised to see prices recover next year.
China produces and consumes about half the world’s steel.
Reporting by Maytaal Angel and Eric Onstad