Vale SA, the world’s largest iron-ore miner, sank to a two-month low on concern that global supplies of the steelmaking ingredient are too high. The Ibovespa posted the best first half of any year since 2009.
Shares of Vale extended their 2015 plunge to 19 percent as Australia cut its price estimates for the commodity, saying the nation’s exports will surge. The raw material dropped below $60 a ton, paring this quarter’s gain to 16 percent.
The slump in iron ore sent a gauge of commodity shares in the MSCI Brazil to the only decline among 10 groups Tuesday. While the industry’s stock swings have abated this month, they reached the highest level since 2011 at the end of May amid a roller-coaster ride in the raw material.
“It’s hard to forecast now where the commodity is going,” Pedro Paulo Silveira, the chief economist at brokerage TOV Corretora, said in a phone interview from Sao Paulo. “Vale has fallen a lot because of prospects for iron ore.”
The stock led losses in the Ibovespa, which added 0.1 percent to 53,080.88 at the close of trading in Sao Paulo. Commodity companies account for about a quarter of the stock gauge. The measure has climbed 6.2 percent this year. Bradespar SA, one of the members of Vale’s controlling group, posted the biggest decline on the index.
Brazilian stocks rallied earlier Tuesday after Petroleo Brasileiro SA, the oil producer at the center of the nation’s largest graft probe, said it has no plans to sell shares before 2019. Investors had been waiting for clarity on how the state-run oil company would fund giant offshore fields without having to return to the stock market to raise cash.
The decision to stay away from equity offerings during the new business plan period brings some relief to shareholders, Bank of America Corp. said in a note to clients.
“That may also show Petrobras’s financing needs are not as big as investors feared,” Silveira said. “The company is paving the way for bigger profits and returns.”
Gains in the Ibovespa were also limited as Greece hurtled toward an uncertain financial future. While less than 0.1 percent of Brazil’s exports went to Greece last year, some of its biggest markets are those most vulnerable to a fallout from the Greek crisis. Nineteen percent of the goods sent abroad went to the European Union, and 56 percent went to developing countries.
The Ibovespa has slid 8.6 percent from this year’s high amid bets Latin America’s largest economy will slow further. The gauge entered a bull market in April, after rallying more than 20 percent from its 2015 low, on speculation government measures to shore up the budget would restore confidence and as Petrobras reported long-delayed results.
Trading volume Tuesday was 6.94 billion reais ($2.24 billion), data compiled by Bloomberg show. That compares with a daily average of 5.1 billion reais through Monday, according to the exchange.