BHP and RIO were both thumped last night in London -5% and -3% respectively despite rising Chinese futures markets for iron ore. The culprit was Vale:
Shares in Vale slumped the most in two weeks, as executives signalled lacklustre trends for iron ore prices this year and investors reacted to a first-quarter profit miss with disappointment.
Preferred shares, world No. 1 iron ore producer Vale’s most widely traded class of stock, shed as much as 4 per cent. The decline thwarted a recovery in the stock that had made gains this week on expectations Vale would report a near record quarterly profit.
On a conference call to discuss the March quarter results, company executives said supply and demand of the main ingredient for steel look balanced. In February, Vale’s head of ferrous minerals Peter Poppinga expected prices hovering around $US80 a tonne this year.
Bloody deluded, based largely on the very vague Chinese One Belt, One Road initiative. But the bullish outlook appears to be triggering a rush for Samarco:
Samarco, owned by Vale and BHP Billiton, will resume operations in the second half of this year, Vale’s president Murilo Ferreira believes . He said, however, that there is an unresolved pending issue on water supply to the mine, in the municipality of Santa Bárbara, in Minas Gerais.
What can I tell you? I don’t have it my numbers. If it comes, duck even lower!
