Brazil's Vale sees improving Chinese iron ore demand in H2
Sao Paulo (Platts)--1Aug2014/401 pm EDT/2001 GMT
Stronger seasonal demand for iron ore in China and slower growth of supply worldwide will likely lead to a recovery in iron ore prices in the second half of the year, the director for ferrous and strategy for Brazil's Vale said.
"We are seeing a period of shutting mines, eliminating the less competitive facilities," Jose Carlos Martins said during a conference call Thursday.
Historically, Chinese demand is stronger during the second half of the year, he said, adding that he sees the iron ore growth rate slowing to 50 million mt in the second half of 2014, compared with 90 million mt added during the first half.
In the first half of the year, better weather conditions during Brazil's wet season and Australia's cyclone season led to higher production in the iron ore industry, Martins said.
"There was the anticipated ramp-up in Australian projects, but despite that, [first-half] demand was lower than expected, leading to a price correction," he said.
Vale's iron ore sales in Q2 fell 11% year on year to $5.3 billion from $6 billion, but rose 4% compared with Q1 sales of $5.1 billion, the company said in an earnings report. Vale's average realized Q2 price for iron ore fines was $84.60/wet mt, excluding run-of-mines sales, $10.20/wmt lower than the Q1 price.
--Jose Guerra, jose.guerra@platts.com --Edited by Annie Siebert, ann.siebert@platts.com
"We are seeing a period of shutting mines, eliminating the less competitive facilities," Jose Carlos Martins said during a conference call Thursday.
Historically, Chinese demand is stronger during the second half of the year, he said, adding that he sees the iron ore growth rate slowing to 50 million mt in the second half of 2014, compared with 90 million mt added during the first half.
In the first half of the year, better weather conditions during Brazil's wet season and Australia's cyclone season led to higher production in the iron ore industry, Martins said.
"There was the anticipated ramp-up in Australian projects, but despite that, [first-half] demand was lower than expected, leading to a price correction," he said.
Vale's iron ore sales in Q2 fell 11% year on year to $5.3 billion from $6 billion, but rose 4% compared with Q1 sales of $5.1 billion, the company said in an earnings report. Vale's average realized Q2 price for iron ore fines was $84.60/wet mt, excluding run-of-mines sales, $10.20/wmt lower than the Q1 price.
--Jose Guerra, jose.guerra@platts.com --Edited by Annie Siebert, ann.siebert@platts.com