China buys 77 pct more and consolidates position as CVRD’s biggest market

7 May 2007

Sao Paulo, Brazil, 7 May – Brazilian mining giant Companhia do Vale do Rio Doce (CVRD) in the first quarter sold raw materials totaling US$1.3 billion, or 77 percent more year on year, to become the company’s largest market by overtaking the Brazilian market itself.

Results for the quarter, presented Friday in a press conference, showed that the company posted net profit of US$2.5 billion on sales of US$8.3 billion, with China accounting for 15.9 percent of sales and Brazil for 13.4 percent.

“Scepticism as to the possibility of China continuing to grow has increased but, even if the country goes into an economic slowdown the large Brazilian companies will tend to sell more over there,” market analyst António Klapka told macauhub.

IN the first quarter of this year, CVRD’s sales to China rose at a greater rate than in the previous nine months.

In the last three months of 2006, the increase in sales to the Chinese market had been 60 percent year on year and in the third quarter of 2006 the increase was 51.5 percent against the same period of the previous year.

China mainly imports iron ore from CVRD, having bought 21.9 million tons in the first three months of this year, which accounted for an increase of 24.8 percent against the January to March period of 2006.

As well as Chinese sales having increased in quantity, “spot prices for iron ore have increased, following a rising trend begun in 2006,” the company said in its quarterly report. (macauhub)