Vale Says Iron Ore Stabilized After Hitting ‘Rock Bottom’
Peter Millard and Juan Pablo SpinettoNov 08, 2011 3:55 pm ET
(Updates with closing share price in last paragraph.)
Nov. 8 (Bloomberg) -- Vale SA, the world’s largest iron-ore producer, said prices for the raw material have stabilized and are recovering from “rock bottom” levels earlier this year.
Lower-than-expected production and strong demand from China, India and South America will boost demand for iron ore in the coming years, Paulo de Freitas Nogueira, a sales-planning manager at the Rio de Janeiro-based company, said today.
Investment costs more than doubled during the past five years and the recent plunge in iron-ore prices forced many producers to shut their mines, Nogueira said during the Americas Iron Ore Conference in Rio.
“Essentially producers stopped producing, with that the market started stabilizing,” Nogueira said. “We believe it has reached rock bottom.”
Iron ore for immediate delivery gained 8 percent since reaching its lowest level in almost two years on Oct. 28. The price rose 1 percent to $126.30 a ton today, its seventh consecutive increase, according to The Steel Index Ltd.
Vale fell 0.5 percent to close at 42.45 reais in Sao Paulo. The shares have fallen 12 percent this year.
--Editors: Jasmina Kelemen, Tina Davis
Link Provided: washpost.bloomberg.com/Story?docId=1376-LUCFZZ6S97...
TRF Price at posting:
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