The drop in world steel demand and the resulting fall in scrap iron prices has brought down prices of direct reduced iron, according to a report published by Venezuela's state heavy industry holding company CVG.
This situation is further complicated by large steel and scrap iron inventories built up in countries from the former Soviet Union, which have flooded the U.S. market at low prices.
Venezuela, as one of the world's largest direct reduced iron producers with installed capacity of 10.5 million tons per year, is hard hit by these low prices. DRI companies in the country include Venprecar, Sidor, Minorca, Comsigua, Posven and Orinoco Iron.
The report says low prices lead to cuts in production volumes, with plants operating at below capacity, as prices in the briquette market are below productions costs.
Prices are expected to fall another 3 percent this year, compared to 2001 figures.
Business News Americas (BNamericas.com)
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