U.S. steelmakers could benefit from new iron ore price hikes because unlike many Asian and European manufacturers they are less dependent on global supplies of the raw material, analysts said on Tuesday.
"Ironically, the higher the increases in global Fe (iron ore) costs, the better off domestic North American steelmakers are," said industry analyst Michelle Applebaum, of Michelle Applebaum Research in Chicago.
"This seemingly anomalous conclusion is due to the fact that very little of the ferrous raw material base of the North American steelmakers is bought from this seaborne trade," she wrote in a research note.
In addition, Applebaum wrote, domestic costs will rise less than global since most mills in the United States use iron ore pellets, rather than the "fines" form of iron ore particles. Pellets are processed and typically sell at a higher price, based on iron content.
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