by Chris Becker
Spot iron was pummeled yesterday, down over 3% as rebar and general steel prices fell in China:
Still up nearly 40% on the year, but momentum is definitely waning for ore prices.
In February, Vale announced it would sell certain “core assets” as it sought to pay down debt towards the targeted $15 billion level. At the end of June, net borrowings stood at $27.5 billion.
The company already has a streaming arrangement with Silver Wheaton over by-product gold production at its Salobo copper mine in Brazil and has just announced an additional $800 million transaction under that arrangement.
In the quarter to end-June, the company’s C1 cash costs FOB to the port came in at $13.2 per tonne. This gives the Brazil-focused company plenty of margin to play with given the iron ore price has gained strongly so far in 2016, currently trading around the $60/t level.