Vale SA (VALE3), the world’s largest iron- ore producer, expects the steel-making ingredient to rebound this year because current prices aren’t profitable for producers in China and other countries.
Iron-ore below $120 a metric ton is a “short-lived” situation, the company’s Investor Relations Director Roberto Castello Branco told reporters at an event in Rio de Janeiro today. Vale is not among the suppliers planning to reduce output because it has low production costs, he said.
“The iron-ore price is below the cost for marginal producers not only in China but also in other countries,” Castello Branco said at the sidelines of the Platts SBB Steel Markets in Latin America conference. “If you are a producer with higher costs, you won’t continue producing at a loss; you will stop your operations.”
Iron-ore fell below $100 for the first time since 2009 last week on concern that rising stockpiles and slowing growth in China, the biggest buyer, will cut demand for the raw material. The decline pushed Vale shares to the lowest level in almost three years.
BHP Billiton Ltd. (BHP), the world’s biggest mining company, expects “long-term” price declines for its commodities because of a slower Chinese economic expansion, Chief Executive Officer Marius Kloppers told the Inside Business program on the Australian Broadcasting Corp. yesterday.
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