SHANGHAI, Jan 26 (Reuters) - Iron ore prices hit their lowest in 5-1/2 years on Monday as some loss-making Chinese steel mills curbed output, ore supplies remained abundant and concerns persisted about the outlook for economic growth in China this year.
Cooling Chinese steel demand forced some steel mills to bring forward plant maintenance, which usually takes place during the Chinese New Year, which falls on Feb. 19. Mills looked to curb oversupply that helped knock nearly a third off prices last year in the world's top producer of the alloy.
"Steel mills have had to cut production as they have suffered losses as high as 200 yuan ($32) a tonne and the timing (for maintenance) was earlier than expected," said Xu Huimin, analyst at Huatai Great Wall Futures in Shanghai.
Xu expected rebar futures could fall further this year as growing supplies of iron ore further weigh on prices.
The benchmark 62 percent grade iron ore for immediate delivery to China fell 3.9 percent to $63.30 a tonne to its lowest level since May 2009, according to data compiled by the Steel Index.
Actually the headline I used came from an article, the Fed in Brazil said "they were raising the prime interest rate to slow inflation". If you want to lower the standard of living for the majority of the people that is what you do. It is an excellent way to enrich the super rich while making the middle class poor.
Boy a lot of opinions based on no facts. My cost is $7. I purchased the day following this post:
ewnobody • Dec 10, 2014 4:29 PM I'm looking at Vale now. Wouldn't cheap oil help bring down expenses? Doesn't seem to matter to Mr. Street. Perhaps I'm wrong and cheap oil has no bearing.
I'll bet you like everyone else on this board has no fingers left. Oh well, just hang in for a few more years and you might break even, maybe.
S&P's equity rating: S&P **** BUY Price Target $12 VALE recently traded at 8.3X our 2015 earnings per ADS estimate, or a 33% discount to its steel peers. Our $12 target price is 10.0X our 2015 estimate, a 31% discount to our peer target. We believe this valuation is appropriate given the pricing environment for VALE's products and its slower than peers earnings growth rate, partly offset by increasing volumes and cost control efforts.
So what? An investment grade company beaten down with a bottoming IO cycle. An argument can be made that this is the best time to buy. Your post S&P credit rating on Vale, how about their equity rating?
Just when you thought it couldn't get much worse, feels like bad news has been in abundant supply forever with this company.
Thanks, but if you look back at the timing of the announcement, you will see that it was out well before the close on Friday -- no doubt accounting for the session's deep sell off together with GS. Used the overreaction to pick up some shares (as I imagine some who follow GS did the same).
We have toured the Vale iron ore properties in Brazil and the copper mines in Canada.They are marvels of rich ore bodies.To bad Vale doesn't have commensurate competent management-- especially in financial management.
• Vale's (NYSE:VALE) credit rating is downgraded by Standard & Poor’s for the first time in more than eight years, as market fundamentals for iron ore continue to weaken and erode Vale's operating cash flow generation as the company's capital expenses remain high.
• The downgrade follows S&P's revision of iron ore price assumptions to $65/ton in 2015 and 2016 and to $70/ton in 2017.
• S&P reduces its rating to BBB+, the third-lowest investment grade, from A-
That black man in Washington will definitely make Aussie worse than toilet paper fool.
Vale's price seemed to have been firming nicely this past week, with some decent news regarding the benefits being realized from lower transport and fuel costs, the initiation at ''Buy from Societe General, and some murmurings about the worst of the sell-off largely being behind us, and priced in. This must have been making some hedge funds and their investment bank friends, who are short Vale and I/O, more and more anxious. So these last few days I've been halfway expecting to see what kind of salvo they release to shake down again Vale and the I/O sector... and then this morning, almost on cue, enter Goldman Sachs.
In my opinion the government regulators need to take even a closer look, and a much harder line, with the investment banks than they are already doing.
Once China stops pegging the Yuan to the dollar it's own people will enjoy a higher standard of living while the dollar will instantly lose a great deal of value. Companies like VALE will be very good to have then.
just look at the chart of the exports from Australia ( last entry on Yahoo ). It is a line up. China is using more IO every year.... but now, they know better how to report economic data to the world. :-)
A growth of 7% does not necessarily mean 7% growth in steel production. The problem right now is excess supply coming into the market by RIO, BHP a, and VALE. That may continue for a couple of years.
This is the mark of a badly-managed company.
6 months ago, the CEO of VALE was sure that by now the price of iron would be about $90. The resident snake on this board, cash.mccall, agreed then with the CEO.
I saw an interview about a month ago with legendary Wall Street guy Byron Wein. He said the slowdown in China has been overblown and he is investing heavily in China. Now, I know it is only one man's perspective, but still operating with over 7% growth and they have just begun to stimulate their economy, I think any nation would take that kind of growth in a heartbeat.