Vale Drops to 3-Year Low as Iron-Ore Prices Slump: Rio Mover
Vale SA (VALE3), the world’s largest iron- ore producer, declined to the lowest in almost three years as prices for the steelmaking material slumped on slower Chinese economic growth.
Vale, based in Rio de Janeiro, dropped 3.2 percent to close at 34.19 reais in Sao Paulo, the lowest since Sept. 11, 2009. The stock lost 9.6 percent this year, compared with a 3.1 percent gain in the Brazilian benchmark Bovespa Index.
Iron ore for immediate delivery fell 4.9 percent to $99.60 a ton today, its seventh consecutive decline to the lowest since December 2009, according to data compiled by The Steel Index Ltd. Shares of Vale are falling because of lower iron-ore prices and signs of slowing economic conditions in China, the biggest user of the steelmaking raw material, said Leonardo Brito, an equity analyst at hedge fund Teorica Investimentos.
“Prices are below $100 already, which is worrying,” he said in a telephone interview from Rio. “If that continues for some time, the profit forecasts for Vale will be lowered.”
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